Hurricane Ian could be among the costliest in US history.
The insurance industry is looking at a loss of $20 billion at the very least, according to Artemis, a catastrophe bond and insurance-linked securities analysis firm. At the higher end, it could be $40 billion.
Why Hurricane Ian will hurt more than Hurricane Charley
Hurricanes Ian made landfall in Florida in the same spot, around the same time, with matching wind speeds, as hurricane Charley in 2004.
But the damage from Ian is poised to be way worse.
Florida’s faltering property insurance industry, by the digits
$258.3 billion: The reconstruction cost value of at least a million homes along the Florida Gulf Coast at risk of storm surge damage
$16.2 billion: State-backed reinsurer’s Florida Hurricane Catastrophe Fund (FHCF, or Cat Fund) liquid resources (plus an estimated bonding capacity of $8 billion
$2 billion: State funds committed to support insurers facing high reinsurance rates
The state insurer can weather the storm
In the last couple of years, homeowners have been flocking to state-owned insurer, Citizens Property Insurance Corp (CPIC), as a last resort. The not-for-profit alternative insurer created by the state legislature in 2002 for Floridians unable to find coverage from private insurers is getting flooded with requests.
The state-run insurer has more than $6 billion in surplus. Early modelling of the storm suggests it could see 225,000 claims worth $3.8 billion in losses.
“They feel very strongly that they’re going to be able to handle this and still have pretty significant reserves,” governor Ron DeSantis told reporters at the state’s Emergency Operations Center in Tallahassee on Wednesday (Sept. 28).
Plus, an emergency order issued by insurance commissioner David Altmaier on Wednesday temporarily prevents property insurers from dropping customers for at least two months in the aftermath of Hurricane Ian.
But not all hurricane-related damages are covered. The storm is going to drop almost a foot of rain over central Florida. A typical home insurance policies—including CPIC’s—does not include flood coverage.
Can’t come home
While millions have been evacuated from their homes, thousands more can’t make it ashore. About 20,000 cruisers are stuck at sea for the next two days as three major Florida ports closed because of the hurricane.