Tornadoes that devastated pockets of homes and businesses across north Georgia one year ago are translating into higher insurance rates for homeowners around the state.
Insured damage, estimated at $75 million in the immediate aftermath of the deadly storms, has skyrocketed to nearly six times that amount -- $435 million -- as the extend of the destruction became clear, state officials said.
That has insurance companies clamoring for relief from Georgia regulators, who must sign off on rate increases. Already, state officials have approved an average 10 percent increase for homeowners insurance carriers since the storms. That's certain to climb higher, officials said, with more rate-increase requests rolling in.
While federal aid and loans worth millions of dollars have flowed into the state to help residents rebuild, the bulk of the recovery has been funded through insurance payouts.
A rash of tornadoes touched down on April 27, 2011, throughout the South, with Alabama bearing the worst of their onslaught. In Georgia, 15 people died, and the northwest corner of the state was particularly hard hit. Some areas south of Atlanta also sustained heavy damage.
Today, homes are sprouting again amid the rubble and many businesses are coming back to life in communities such as Ringgold and Griffin.
FEMA has pledged about $5.45 million in personal assistance grants to Georgians. Of the 5,604 people who applied for FEMA aid, 1,273 were determined to be eligible. FEMA officials said that a 20 percent eligibility rate is typical following disasters.
The U.S. Small Business Administration has divvied up more than $8 million in low-interest loans, but has turned away more applications than it approved, according to data obtained through a Freedom of Information Act request. The SBA approved just 37 percent of the 457 Georgia applications it received. The bulk of the rejections were because the applicant had poor credit or lacked the ability to repay the loan.
SBA spokesman Michael Lampton said the areas of Georgia that were badly damaged were, by and large, economically disadvantaged. Loan applicants who were unable to qualify for loans were steered to FEMA, which offered grants of up to $30,000 for eligible individuals.
Retta Harris, 48, said her insurance company promptly paid her claim of approximately $70,000 to repair her damaged house. But many neighbors didn’t have insurance, she said, and had to turn to FEMA.
“It went really smoothly,” the 48-year-old Ringgold resident said. As for whether the cost of her coverage has gone up, she said: “Not as of yet. I understand it probably will.”
State Insurance and Fire Safety Commissioner Ralph Hudgens said the increase could have been far worse. Insurance companies, on average, sought a 40 percent bump last year. The state granted far less.
"We were not going to grant all of that," Hudgens said, explaining such a sharp jump would be too much for consumers to handle.
But he said the message to insurers was: Try again. "Come back to us again next year and make your case," he said.
David Colmans, executive director of the Georgia Insurance Information Service, a trade group for property and casualty insurers, downplayed the role last April's storms had in current rate increases, saying many of the requests had been in the pipeline before the tornadoes struck.
Colmans said homeowners' rates in Georgia had been low for years, adding that to win an increase, insurers must provide actuarial proof to state regulators that the hike is needed.
Even where the physical damage has been repaired, the storms continue take a financial toll on some communities, several residents said. That toll comes in the form of lower property values.
“I’d be hard pressed to put a percentage, but probably at about a 15 to 20 percent decrease in value,” said Eddie Floyd, an agent with Coldwell Banker Kinard Realty.
And not everyone is staying.
“Some people want to rebuild quickly and stay, but other people want to get as far away as possible,” Floyd said.
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