Estimates of the damage from Hurricane Andrew, still churning its way toward Louisiana and Texas, exceed $15 billion already, and Maryland insurers fear a repeat of the catastrophic level of losses they experienced from Hugo two years ago.
Dade County, Fla., emergency workers were estimating today the hurricane had caused between $15 billion and $20 billion in damage to the south Florida coast.
Maryland insurers, including GEICO Corp. of Chevy Chase, and Baltimore's USF&G Corp., said they have established emergency locations in South Florida and sent teams of insurance adjusters to the devastated areas.
"We have received several hundred claims already for homeowners and auto," Carroll Franklin, GEICO's investor relations chief, said today. He added that it's too early to estimate what the total damage will be.
Mr. Franklin said GEICO's exposure in Texas and Louisiana, the next anticipated destinations for Andrew, are much lower than in Florida.
GEICO paid out about $10 million in claims from 1989's Hurricane Hugo, which resulted in almost $10 billion in losses for all insurers.
USF&G paid $36 million in the third quarter of 1989 alone as a result of Hurricane Hugo, which left 89 people dead when it swept through the Caribbean and into the Carolinas. The company, which lost more than $700 million in 1990 and 1991, can ill afford another catastrophic year. In the two quarters of this year, it essentially broke even after paying dividends.
USF&G has been reducing its presence in Florida and Texas since last year, when it announced it would write no new policies there because of the risk of costly catastrophes, said spokeswoman Kerrie Burch-Deluca.
Some industry members already are calling 1992 a costlier year for insurers than 1989, when Hurricane Hugo and the San Francisco earthquake led to billions of dollars in losses for individuals and insurers.
Mr. Franklin said GEICO had less exposure in the Carolinas than in Florida, which accounts for 13 percent of the company's business. GEICO wrote about $29 million in South Carolina, which bore the brunt of Hugo in the United States.
GEICO's premiums in Florida this year amount to about $240 million, with roughly $15 million in homeowners' insurance.