Charley Not as Bad as Andrew but Bad Enough

As the remnants of Hurricane Charley disintegrated off the New England coast Aug. 15, Florida officials estimated the storm caused $5 billion to $11 billion in damage to insured homes. At least 15 people were killed.

The hardest-hit areas appeared to be Punta Gorda and Port Charlotte in Charlotte County, and the Gulf Coast barrier island of North Captiva was cut in two by the ferocious Category 4 hurricane. The Federal Emergency Management Agency expanded its disaster aid zone from four to 25 counties.

The initial damage estimate was based on mapping software calculating the value of homes and insurance policies in Charley’s path, said Tami Torres, a spokeswoman for state Chief Financial Officer Tom Gallagher, who oversees the insurance industry. Uninsured homes, business losses and damage to automobiles were not included.

“Our worst fears have come true,” Gov. Jeb Bush said after the skies cleared.

By 11 a.m. on Sunday Aug. 15, Charley was reduced to 35 mph winds off New England after officials pronounced it the worst to wallop Florida since Hurricane Andrew in 1992. Twenty-six deaths were directly linked to Andrew, which caused about $20 billion in insured property losses. Andrew also forced 11 insurance companies into bankruptcy, leaving about 930,000 policyholders with no coverage.

Charley cut northeast across Florida, hit open ocean again and bent back toward land, hitting South Carolina’s Grand Strand resort region. It moved into North Carolina and up the eastern seaboard as a tropical storm.

In Florida, Charley gutted oceanfront homes and trailer parks, knocking out power to an estimated two million people as it crossed from southwest Florida to Daytona Beach.

The storm was stronger than expected when the eye reached the mainland, pummeling the coast with winds reaching 145 mph and a surge of sea water of 13 feet to 15 feet.

Heavy damage to expensive beachfront homes also was reported on the popular islands of Captiva, Cabbage, Useppa and Sanibel.

Thirty-one mobile-home parks in Charlotte County sustained major damage, some with more than 1,000 units, said Bob Carpenter, a sheriff’s spokesman. He said teams were sent to each park to search for bodies and survivors, but “we just couldn’t get the vehicles in — there is so much debris.”

Charley devastated citrus groves, especially those in the inland counties of DeSoto, Hardee and Polk, said the trade group Florida Citrus Mutual. The citrus industry is a $9 billion-a-year industry. “Growers in these areas have seen their groves, barns, equipment and homes destroyed,” said Andy LaVigne, the grower association’s chief executive. “This will certainly have a huge impact on their livelihood and this season’s citrus crop.”

The violent storm actually caused less damage than had been feared. California-based Risk Management Solutions revised its initial loss estimate for Charley down to $5 billion from $10 million to $15 billion, reflecting a decrease in the storm’s breadth and intensity after landfall on Friday, Aug. 13.

Some observers said that insurers were better prepared for Charley and should not have to hike premiums significantly as they did after 1992’s Andrew. They also predicted that fewer, if any, insurers would go bankrupt s as a result of Charley losses.

A.M. Best Co. said it believes that virtually all companies will be able to meet their commitments after Charley. While some individual insurance company ratings may be affected, the overall financial strength of the insurance industry will not be significantly weakened, the rating organization reported on Aug. 16.

The Insurance Information Institute believes the industry will be able to make its payments, spokeswoman Loretta Worters said. “They have enough in reserves so that isn’t a problem,” she said.

State and industry officials said that previous premium increases averaging 100 percent statewide and 200 percent in South Florida as well as legislative and regulatory changes made because of Andrew would help pay for Charley.

Charley “is the type of storm our system is developed to handle” without tremendous rate increases or insurer bankruptcies, Florida Insurance Council spokesman Sam Miller said.

In addition to granting premium hikes the state also overhauled insurance regulations after 1992. Florida now has a $15 billion Hurricane Catastrophe Fund, which provides reinsurance to help pay for major disasters.

Florida also created a state-regulated insurer of last resort for people who couldn’t get coverage in the private market. Now known as Citizens Property Insurance Corp., it provides hurricane coverage for about 812,000 homes.

Another change lets insurance companies charge a percentage deductible instead of set dollar amounts, which used to be around $500-$1,000. Most homeowners now have a two percent deductible. So the owner of a $200,000 house would have to pay for the first $4,000 in damages before insurance policy kicked in.

Associated Press reports were used in this story. Copyright 2004 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Topics Florida Catastrophe Carriers Hurricane