According to top rating agencies, Hurricane Ian could cause Florida as much as $40 billion in insured losses.
On Wednesday, the storm system passed through Florida and ripped through the central and western parts of the state with the speed of a Category 5 hurricane. Hurricane Ian reached speeds of 150 miles an hour and reaccelerated on Friday, before reaching South Carolina.
Fitch Ratings stated that Florida’s insurance professionals have suffered financial losses and diminished capital over the past few years, making them vulnerable to large-scale catastrophic events that can cause losses that exceed reinsurance limits. Fitch Ratings projects insured losses of between $25 billion to $40 billion. This is a number that exceeds Hurricane Ida’s $36 billion damage and falls short of Hurricane Katrina’s $65 billion.
Fitch stated that many insurers offering property coverage in the state suffered severe downturns in underwriting performance and capitalization in recent years, despite there not being a hurricane in the state since 2018. This trend has caused a number of smaller insurers to liquidate, increasing the difficulty for policyholders to find private market homeowners insurance coverage. Hurricane Florence is likely to increase the reinsurance capacity crisis facing insurers and possibly cause the exit of more Florida-based specialist companies.
Florida’s output was $1.3 trillion last year. This indicates that Hurricane Ian could cause damage to as high as 3 percent of the Sunshine State’s economy.
According to the Florida Office of Insurance Regulation, Floridians reported almost $1.5 billion in insurance-related claims by Monday afternoon. This includes claims from over 143,000 residential property owners as well as 2,380 commercial property owners. A little more than 2% have been settled so far from the 186,000+ claims.
DRBS Morningstar forecasted that Hurricane Ian’s economic impact would be greater than the $50 billion loss caused by Hurricane Irma in 2017. The firm also estimated insured losses of between $25 billion to $40 billion.
“Given a hurricane path and intensity similar to Hurricane Charley, and considering the substantial rise in population and property value in Southwest Florida,” Patrick Douville, DRBS Vice President of Insurance, stated in a statement. “Claims from Ian will continue the trend of property risks in Florida becoming more costly and more difficult to insure,” Douville said.
According to a press release by Governor Ron DeSantis, the Florida Disaster Fund had raised over $21 million for financial assistance for residents. More than 1,600 people have been rescued by first responders, and 42,000 are on the ground responding to more than 840,000 power outages. Power outages in areas like Charlotte County and Lee County are as high as 60%.
Only 29% have flood insurance in the nine counties that have been declared a disaster by the White House. Officials trying to rescue people in western Florida were challenged by storm surges up to 18 feet.
U.S. Coast Guard deputy commandant Peter Gautier was part of the response to Hurricane Katrina. He described Hurricane Ian as “up there” in terms of severity in an interview with Fox News. He said that the combination of huge storm surges from wind-driven waves, water from the ocean, and up to the rivers is something we haven’t seen before.