May is prime season for tornadoes in states like Kansas, Oklahoma and Texas. Records indicate it is the month when more tornadoes occur than in any other. While last year was fairly quiet in terms of severe weather, recent tornado outbreaks have caused enough damage, resulting in higher insurance rates.
While twisters occur in every state and at all times during the year, spring is economically devastating for these weather systems.
MSN.com reports that two of the most costly natural disasters in history came from tornadoes. The April 2011 Tuscaloosa and Birmingham twisters resulted in 65 deaths and $7.3 billion in property damage. 161 people were killed in Joplin in May of 2011, resulting in $2.1 billion in insurance claims.
Munich Re, the world’s largest insurance company says a three-day outbreak of twisters in March 2012 resulted in $5 billion in losses.
The Chattanooga Times Free Press reports that insurance agencies across the country paid out over $25 billion in storm damage claims in 2011 alone.
According to an electronic insurance exchange, MarketScout, insurance rates went up 4% in March on homes valued under $1 million. With any more weather events resulting in high property losses, the insurance industry may be shifting more risk and costs back to consumers and taxpayers.