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CoreLogic Inc. said late Tuesday that the reconstruction value for residential damage from this week’s outbreak of severe convective storms in the U.S. plains will approach $3.7 billion.
Separately, in a note Wednesday, financial analyst DBS Morningstar said damages are estimated to be $2 billion to $5 billion, within insurers’ tolerances.
The worst damage was in Kentucky where 11,762 structures were damaged at a projected reconstruction value of nearly $2.9 billion, CoreLogic said.
In Tennessee, it was 1,801 structures at $455 million; in Arkansas, 667 structures at $120 million; and in Illinois, 470 structures at $163 million. Missouri and Mississippi also saw lesser damages.
Kentucky was the hardest-hit state when on Friday evening, Dec. 10, a deadly series of tornadoes hit across six states: Arkansas, Illinois, Kentucky, Mississippi, Missouri and Tennessee, according to CoreLogic.
The largest cities affected by these tornadoes included Mayfield and Bowling Green, Kentucky. The Mayfield tornado was preliminarily rated an EF3 but will likely be upgraded to at least an EF4 as structural engineers and meteorologists review the damage via ground surveys, CoreLogic said.
“While severe, this event is expected to produce insured losses within historical levels for the U.S. property and casualty insurance industry, which is sufficiently prepared to cover these claims without significant capital impact,” DBS Morningstar said in a Wednesday brief.
Property/casualty insurers with substantial business in the affected states will incur a “moderate” earnings impact, DBS Morningstar said, adding that while tornado damage can be severe, it is “dwarfed” by damages from hurricanes and other disasters.
While tornado damage is generally covered under property insurance contracts, “providing coverage in Tornado Alley in the Central Plains of the U.S. can be challenging for insurers, which must charge higher premiums,” DBS Morningstar said.
CoreLogic was in June purchased by private equity firms Stone Point Capital LLC and Insight Venture Management LLC, which does business as Insight Partners, for $80 per share in cash.
Insured commercial property losses from Missouri tornadoes in May reached $16.4 million as of June 30, with total insured losses expected to reach at least $139 million, the Missouri Department of Insurance, Financial Institutions & Professional Registration reported Thursday.