The Florida fire reports that I see are in the $300 million range. Somebody's going to have to pay. And the action is just beginning with Miami calling for a long hurricane season. Where does Gieco figure in all this?? Anybody out there with insurance experiance that can shed light??
Let me tell you how I spent my holiday weekend - not like BrkRules in the Keys, but part of a 45,000 evacuation from Palm Coast (Flagler county), Florida. We had several homes destroyed (could have been a lot worse), but the main damage here and in the fires up and down the coast is the destruction of timber. Unlike Hurricane Andrew which came onshore and took out hundreds of homes, damage to homes represents a small amount of the total damage.
I believe (and just doubled checked) that BRK's cat insurance is for hurricane damage. I don't think that the 400,000 or so acres would be insured as it is mainly logging. The expenses have been in fighting the fires - and believe me, those dudes a doing a SUPERB job. The outpouring of help from across the country is unbelievable - last week I saw trucks from Wyoming, a dozen or so from N Carolina, several from S Florida... The problem in this area was that the fires literally erupted and there was NO ONE TO FIGHT THEM. The federal govt didn't get off their duff until Saturday to send in the BIG equipment and the personnel. Thats why we all had to leave (IMO) - they are here now and I see the big helicopters dumping water. The fire got as close as 2 miles from my house; however, it is only 35% contained and is nowhere near being under control. Thursday night the sky looked like a night launch at the Cape - a red glow filled the sky.
Anyway, our house is fine - we evacuated by water and spent the weekend on the boat. Started reading Graham's Intelligent Investor, but couldn't focus my mind on much of anything.
And here we moved up from S Florida to get away from the hurricanes!
Does everyone have a DISASTER PLAN?? You never know when you'll need it.......
Anyway, I don't think BRK is going to be paying out any big $$$.
Another Observer...........Thanks for the Eyewitness post. Hope you're right about minimal BRK exposure. I have no proof, but my sense of things gives me the feeling that the super cat industry is in for years of excitement. From an East Coast perspective, we've had lots of waterfront building since the 50's... expensive homes too!! There's just so many more folks that want to live on the water. My wife and I just took a month at Sunset Beach, N.C. In 1955 Hurricane Hazel flattened that island and it's been completely rebuilt!! Eventually the government and insurance companies are going to have to tell people that if they live in harms way they do so at their own risk.
It does have some exposure to catastrophes through its car insurance policies -- if their insureds have comprehensive coverage and their cars are destroyed by hurricanes it reimburses the losses.
I would think though that their exposure is small.
Berkshire Hathaway underwrites supercat contracts for other insurance companies through its another subsidiary, National Indemnity.
Warren Buffett said recently that his worst case estimate for a loss on an event was around 600 million dollars. Look at his letter to shareholders. Something could have changed since his letter, but I would not expect him to do something too imprudent.