Insurers face massive storm bill

Insurers and residents counting the cost of Hurricane Charley

Insurers estimate that Hurricane Charley, the worst storm to hit the US in over a decade, may cost them as much as $14bn (£7.6bn; 11bn euros).

At least 16 people have been killed and thousands left homeless after Florida was pummelled by high winds.

Companies, however, will get help from the US government, which has set up a special fund to pay for repairs.

The world's largest reinsurer, Munich Re, estimates that the total amount of damage done will be closer to $20bn.

Hurricane Andrew left a bill of about $22bn when it ripped through the US 12-years ago.

Big catastrophe

While the total size of claims may seem massive, any damage to the profitability of the insurance companies involved is set to be far smaller.

Munich Re estimated that the storm would cost it a "low triple-digit euro sum"- the low hundreds of millions.

Insurance giant Allianz said the impact on results could be around 50m euros ($61m; £33.5m).

At Lloyd's of London, experts think they will have to meet about a third of the costs.

Insured losses US$m 1992-USA,Fl-Hurricane Andrew-$17,000m 1994-USA,LA-Earthquake-$15,300m 1990-Western Europe-storms-$10,200m 1991-Japan,Hokkaido-Typhoon-$5,200m 1995-Japan,Kobe-Earthquake-$3,000m Source: Munich Re

One group said it did not expect the size of claims related to Hurricane Charley to cause problems for Lloyd's syndicates.

Following Hurricane Andrew in 1992, many insurance companies raised premiums and some observers are speculating that the same could happen again now.

Claimants

Most of the damage caused by Hurricane Charley happened in a stretch of Florida which runs from Fort Myers to Orlando, and advice is being posted for victims on the internet.

For example, www.news14charlotte.com advises people to photograph the exterior and interior of their premises so they have a record of the damage.

Calling the insurance agent immediately and reporting the claim is key as the agent will then prepare a Notice of Loss form, and an adjuster will be assigned to assist the claimant.

The site also advises people to separate damaged and undamaged property, putting it in the best possible order for the adjuster's examination.

Once the insurance claiming process is underway, people can apply for financial help from the US government.

Helping hand

Twenty-five counties have been declared disaster areas and according to the Federal Emergency Management Agency (FEMA) some residents will be eligible for low-cost loans and direct grants.

Others will be able to get help from the U.S. Small Business Administration, which is providing low-interest loans for homeowners, people in rented accommodation, businesses and private non-profit organizations that are not fully covered by insurance.

To seek government help log on to FEMA's Web site at www.fema.gov. and click on Help After a Disaster: Applicant's Guide to the Individuals & Households Program.

Those without access to a computer can also call FEMA's Disaster Helpline at [phone].