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Florida’s property insurance market was distressed before Hurricane Ian appeared on the radar with the state’s 6.2 million homeowners paying at least three times more than those elsewhere in the United States spend on coverage, according to the Insurance Information Institute.
After the massive, slow-moving storm punches its way through the state, analysts fear property insurance claims could knock many of the 50 thinly-capitalized carriers writing policies in Florida out of business, force more property owners to enroll in the state-backed “insurer of last resort,” and impose significant costs on taxpayers nationwide.
CoreLogic, a California-based insurance data analytics firm, released a Sept. 26 report that estimated 1,044,412 single-family and multifamily homes on Florida’s Gulf Coast were “at risk” if Ian made landfall as a Category 4 hurricane—which it did Sept. 28 after reaching Category 5 earlier in the day.
Those 1 million-plus homes represent $258.3 billion in “replacement value,” which CoreLogic defines as “the cost to completely rebuild homes in these areas” and thus is “not a representation of expected damages” from Ian.
That analysis was based on forecasts at the time that projected Ian would come ashore in-or-around Tampa Bay, which has not been hit by a major hurricane since 1921. Instead, Ian made landfall to the south in Charlotte Harbor, one of the least populated stretches of southwest Florida’s Gulf coast.
Disaster modeller Enki Research, after Ian made landfall, issued a projection that Ian would cause at least $54 billion in damage, about the same as 1992’s Hurricane Andrew, the seventh-costliest U.S. disaster since 1980, according to the Federal Emergency Management Agency (FEMA).
But while the region’s most-congested urban area dodged a face-first smash from hurricane winds, it won’t escape unscathed from storm surge and flooding—nor will a swath of Central Florida, Orlando, and Jacksonville, all of which forecasters say is in Ian’s bruising path.
“Many homes along Florida’s western coast are at risk of storm surge inundation regardless of where the storm makes landfall,” CoreLogic senior hazard scientist Dr Tom Jeffery said in the report, “and even more homeowners will contend with heavy rainfall and hurricane-force winds” as the storm makes its way north across the state.
The wreckage Ian leaves in its wake could include bankrupted property insurers and a significant boost in enrollment in Citizen’s Property Insurance Corp., the non-profit “insurer of last resort” created by state lawmakers in 2002 to provide property insurance to homeowners who cannot secure property insurance policies from an ever-winnowing number of commercial providers.
Major corporate insurers such as State Farm, Allstate, and Liberty Mutual abandoned Florida because of hurricane losses, beginning in a trickle after 1992’s Hurricane Andrew and then en masse after a spate of 2004-07 storms.
