© Reuters. FILE PHOTO: Residents line up to shelter after record breaking winter temperatures in Galveston, Texas
By Suzanne Barlyn
(Reuters) – Insurers could suffer record losses in catastrophes in the first quarter after the historic winter storm in Texas, which paralyzed the state’s electricity grid and caused significant property damage such as collapsed roofs and burst pipes, the rating agency AM Best said on Friday.
The storm occurred during what is typically the most harmless quarter to catastrophe damage and which could become the costliest winter weather event in Texas history, AM Best said in a report.
The Texas Department of Insurance plans to collect data from property insurers to determine the cost of the crippled power grid, roof collapses, burst pipes and other problems, a spokesman said.
“We expect this to be a big event, but we just don’t know how big it will be,” said Texas Insurance Department spokesman Ben Gonzalez, noting that the data exploration is breaking the regulator’s process after other major storms how hurricanes reflects.
Karen Clark & Co., a Boston company whose software helps insurers predict catastrophe losses, estimates $ 18 billion in property damage coverage in Texas and other states, a spokesman said.
Bitter cold weather and snow have crippled Texas since Sunday, shutting down much of the state’s electricity grid, and freezing pipes and waterways. Communities across the state are either running out of water or having to boil it for safety reasons.
Texas Governor Greg Abbott confirmed that all power plants were online as of Thursday afternoon. He called on lawmakers to pass laws to ensure the power grid is prepared for cold weather going forward.
The Texan insurers expect “hundreds of thousands of claims,” said Camille Garcia, spokeswoman for the Insurance Council of Texas on Thursday. [L1N2KO3AX]
“This can be anything from small fender benders to significant damage to the house from burst pipes and everything in between,” Garcia said.
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