ORLANDO — For decades, people nationwide paid higher insurance rates for catastrophic and costly hurricanes in places such as Florida.
Lately, it has been the other way around.
In recent years, thunderstorms and tornadoes are collectively outpacing tropical storms in insurance costs, Steven Weisbart, chief economist for the Insurance Information Institute, said Tuesday.
Since 1990, tropical activity has accounted for about 43 percent of insured catastrophe losses. But since 2008, tornadoes and thunderstorms have cost three times as much as tropical cyclones, about $60 billion to about $20 billion, Weisbart told the opening session of the National Hurricane Conference.
Though last year’s 19 tropical storms tied 2010, 1995 and 1887 as the third-busiest season, Florida has gone six years without a hurricane landfall, and didn’t even get a tropical storm in 2011.
“Many people may be asking, ‘Jeez, since we’re having no hurricanes, why are rates going up?’ The answer is, there are many insurance losses other than hurricanes,” Weisbart said.
Average losses in thunderstorms and tornadoes are up more than fivefold since the early 1980s.
“Hurricanes get all the headlines, but thunderstorms are consistent producers of large-scale loss,” he said.
Last year was the fifth-most expensive for insured catastrophic losses at about $40 billion; that accounted for more than half the overall cost of $72.8 billion.
Much of that was because of the 2011 tornado season. It constituted the fourth-costliest U.S. insurance event, at $21.3 billion in insured losses. Of that, $3.65 billion was for the tornadoes in Joplin, Mo., and Tuscaloosa and Birmingham, Ala.
Hurricane Irene, which struck the mid-Atlantic and northeastern United States last year, was the 11th-costliest event at $4.3 billion. In 2011 dollars, Hurricane Katrina was costliest at $47.6 billion; Hurricane Andrew was second at $25 billion .
With hurricane season two months away, there are indications that the trend will continue.
“Even if there are no significant tropical storms this year, we are likely to have another expensive year from an insurance point of view,” Weisbart said. “We just seem to have been very unlucky in terms of where (thunderstorms and tornadoes) hit and how much damage they did.”
With 375 tornadoes through Sunday, this year is ahead of 2011’s 1,897 tornadoes, which is “worrisome,” Weisbart said, although he said it’s unlikely to top 2011.
Palm Beach Post Staff Writer