Fact file: Alabama hurricane insurance

June 2020

  • Four of the 10 costliest hurricanes in U.S. history have impacted Alabama: Hurricane Michael in 2018, Hurricanes Irma and Harvey in 2017, and Hurricane Katrina in 2005.
  • There were 54,348 flood insurance policies in Alabama in 2018. Standard homeowners policies typically do not cover flood damage. Flood insurance is covered by the National Flood Insurance Program, but private flood insurance is becoming increasingly available.
  • There were 784,657 people living in coastal areas in Alabama in 2015, up by 2.5 percent from 2010, according to the U.S. Census Bureau.
  • In Alabama, about 52,000 single-family homes were at risk in 2020 for storm surge damage from hurricanes up to Category 5 strength, according to CoreLogic, Inc. These homes would cost $9.4 billion to completely rebuild, including labor and materials.
  • The Alabama Insurance Underwriting Association (AIUA) was voluntarily formed in the early 1970s by the insurance industry in cooperation with the Alabama Department of Insurance as a market of last resort to provide property and windstorm and hail insurance in the coastal areas of Alabama.
  • The AIUA’s exposure base has expanded rapidly. The exposure to loss—insured value of all properties—was $5.1 billion in fiscal year 2019 up from about $3.3 billion for fiscal year 2010. The AIUA had about 18,000 policies in force in fiscal year 2019 compared with 21,000 policies in 2018.
  • AIUA policies have a hurricane deductible that applies only in the event of a hurricane. The standard deductible for all other perils is $500.

Top 10 Writers Of Commercial Insurance In Alabama By Direct Premiums Written, 2019 (1)

 

Rank Group/company Direct premiums written ($000) Market share
1 Travelers Companies Inc. $248,292 6.6%
2 Liberty Mutual 160,252 4.3
3 Chubb 154,583 4.1
4 Auto-Owners Insurance Co. 150,333 4.0
5 CNA 145,014 3.9
6 Zurich 137,079 3.6
7 American International Group (AIG) 130,932 3.5
8 Nationwide Mutual Group 118,437 3.2
9 The Cincinnati Insurance Cos. 114,654 3.0
10 Progressive 102,638 2.7

(1) Before reinsurance transactions.

Source: NAIC data, sourced from S&P Global Market Intelligence, Insurance Information Institute.

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Top 10 Writers Of Homeowners Insurance In Alabama By Direct Premiums Written, 2019 (1)

 

Rank Group/company Direct premiums written ($000) Market share
1 State Farm $496,918 27.2%
2 Alfa Mutual Group 250,507 13.7
3 Allstate Corp. 218,869 12.0
4 USAA Insurance Group 161,541 8.8
5 Travelers Companies Inc. 83,955 4.6
6 Farmers Insurance Group 79,939 4.4
7 Liberty Mutual 62,671 3.4
8 Auto-Owners Insurance Co. 49,501 2.7
9 Nationwide Mutual Group 45,893 2.5
10 COUNTRY Financial 41,043 2.2

(1) Before reinsurance transactions.

Source: NAIC data, sourced from S&P Global Market Intelligence, Insurance Information Institute.

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Top 10 Writers Of Private Passenger Auto Insurance In Alabama By Direct Premiums Written, 2019 (1)

 

Rank Group/company Direct premiums written ($000) Market share
1 State Farm $847,370 23.0%
2 Alfa Mutual Group 501,549 13.6
3 Berkshire Hathaway Inc. 414,662 11.2
4 Allstate Corp. 400,960 10.9
5 Progressive 345,091 9.3
6 USAA Insurance Group 275,865 7.5
7 National General Holdings Corp. 115,379 3.1
8 Travelers Companies Inc. 82,966 2.2
9 Liberty Mutual 78,023 2.1
10 Farmers Insurance Group 78,012 2.1

(1) Before reinsurance transactions.

Source: NAIC data, sourced from S&P Global Market Intelligence, Insurance Information Institute.

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Top 10 Costliest Hurricanes In The United States (1)

($ millions)

        Estimated insured loss
Rank Date Location Hurricane Dollars when occurred In 2019 dollars (2)
1 Aug. 25-30, 2005 AL, FL, GA, LA, MS, TN Hurricane Katrina $41,100 $52,828
2 Sep. 19-22, 2017 PR, USVI Hurrican Maria (3) 25,000-30,000 26,100-31,300
3 Sep. 6-12, 2017 AL, FL, GA, NC, PR, SC, UV Hurricane Irma (3) 25,000-30,000 26,100-31,300
4 Aug. 25-Sep. 1, 2017 AL, LA, MS, NC, TN, TX Hurricane Harvey (3) 18,000-20,000 18,800-20,800
5 Oct. 28-31, 2012 CT, DC, DE, MA, MD, ME, NC, NH,
NJ, NY, OH, PA, RI, VA, VT, WV
Hurricane Sandy 18,750 21,065
6 Aug. 24-26, 1992 FL, LA Hurricane Andrew 15,500 25,867
7 Sep. 12-14, 2008 AR, IL, IN, KY, LA, MO, OH, PA, TX Hurricane Ike 12,500 20,861
8 Oct. 10-12, 2018 AL, FL, GA, MD, NC, SC, VA Hurricane Michael (3) 9,000-12,000 9,200-12,200
9 Oct. 24, 2005 FL Hurricane Wilma 10,300 13,239
10 Aug. 13-14, 2004 FL, NC, SC Hurricane Charley 7,475 9,906

(1) Property losses only. Excludes flood damage covered by the federally administered National Flood Insurance Program. Ranked on dollars when occurred. As of September 30, 2020.
(2) Adjusted for inflation through 2019 by the Insurance Information Institute using the GDP implicit price deflator.
(3) Insurance Information Institute estimate based on data from catastrophe risk modelers, reinsurance companies, the Property Claims Services unit of Verisk Analytics, the Federal Emergency Management Agency of the U.S. Department of Homeland Security, and the Florida Office of Insurance Regulation. These estimates are preliminary because the organizations involved periodically resurvey the events, and the severity of losses and other factors create a high level of uncertainty surrounding the ultimate loss figures.

Source: Insurance Information Institute, catastrophe risk modelers, reinsurance companies, U.S. Department of Homeland Security, the Florida Office of Insurance Regulation, the Property Claim Services® (PCS®) unit of ISO®, a Verisk Analytics® company, and the U.S. Bureau of Economic Analysis.

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Estimated Value Of Insured Coastal Properties Vulnerable To Hurricanes By State, 2015 (1)

($ billions)

Rank State Commercial Residential Total Coastal Total exposure (2) Coastal as a percent of total
1 New York  $2,093 $1,272 $3,365 $5,571 68%
2 Florida  1,483 1,718 3,200 4,058 79
3 Virginia  92 106 1,993 2,078 10
4 Texas  725 638 1,363 5,358 28
5 Massachusetts  441 511 953 1,765 54
6 New Jersey  373 422 795 2,453 32
7 Connecticut  290 385 675 1,025 64
8 Louisiana  182 147 329 896 38
9 South Carolina  112 126 239 931 26
10 Maine  73 111 184 321 53
11 North Carolina  69 109 178 2,014 8
12 Alabama  63 65 128 1,014 13
13 Georgia  53 56 109 2,171 5
14 Delaware  34 59 93 241 29
15 New Hampshire  32 42 74 328 23
16 Mississippi  36 35 71 527 14
17 Rhode Island  25 46 71 241 22
18 Maryland  8 10 18 1,476 1
  All states above  $6,184 $5,858 $13,838 $32,468 38%
  Total, United States $6,184 $5,858 $13,838 NA 16%

(1) Includes residential and commercial Gulf and East Coast properties, as of December 31, 2015. Ranked by value of total insured coastal property.
(2) Total exposure is an estimate of the actual total value of all property in the state that is insured or can be insured, including the full replacement value of structures and their contents, additional living expenses and the time value of business interruption coverage.

NA=Data not available.

Source: AIR Worldwide.

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Other Resources

Alabama Insurance Underwriting Association

I.I.I. Facts & Stats: Flood Insurance

I.I.I. Facts & Stats: Hurricanes

I.I.I. Issues Updates: Catastrophes

I.I.I. Issues Updates: Hurricane and Windstorm Deductibles

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