The aftermath of Hurricane Milton has left a significant mark on the insured industry, with forecasted losses ranging between $30 billion and $50 billion. This projection comes from the Extreme Event Solutions group at Verisk (NASDAQ: VRSK), highlighting the severe impact of the storm on onshore properties across Florida.
Double Impact: Hurricane Helene and Milton
Hurricane Milton followed closely after Hurricane Helene, leading to compounded damage across the region. Verisk’s forecast emphasized that the close timing of these two hurricanes could complicate the loss development and settlement processes for insurers, especially in areas that experienced damage from both storms. Regions from Tampa Bay, south to Siesta Key, and further down the coast towards Fort Myers, saw substantial damage from the successive storms, posing challenges for recovery efforts.
Higher Insured Losses from Milton
Verisk's data suggests that while both hurricanes caused similar levels of damage, the insured losses from Hurricane Milton are expected to be significantly higher than those from Helene. One primary reason for this is the nature of the damage: Milton inflicted a greater proportion of loss due to wind, while Helene's damage was driven more by precipitation-induced flooding. Flooding in inland areas, particularly those affected by Helene, had lower insurance take-up rates, resulting in fewer insured claims. Conversely, wind damage, a more common insured peril, was prevalent with Milton, leading to more claims and higher payouts by the insurance industry.
Verisk's Commitment to Resilience
“The US is once again faced with recovering from a devastating hurricane that tragically took the lives of many individuals,” said Rob Newbold, president of Verisk Extreme Event Solutions. “We are committed to learning from these events to support the safety, security, and resilience of the people and communities affected, and of others across the world.”
Verisk's commitment to understanding and learning from these catastrophic events is crucial for enhancing the resilience of affected communities and ensuring a more robust response to future storms. The organization's modeling and analysis provide valuable insights that help insurers, property owners, and local authorities better prepare and recover.
What Verisk's Estimates Include
Verisk’s insured loss estimates encompass damage to onshore residential, commercial, and industrial properties, as well as automobiles. Coverage includes building, contents, and time element insurance, along with considerations for demand surge — the increased cost of goods and labor following widespread disaster. However, the estimates do not account for losses paid by the National Flood Insurance Program, uninsured property losses, non-modeled losses (such as tornadoes spawned by the hurricane), or damages to offshore assets and non-US properties.
The Road to Recovery
The scale of damage from Hurricane Milton underscores the ongoing need for comprehensive insurance coverage, especially in hurricane-prone areas like Florida. As communities work towards rebuilding, it is vital to ensure that properties are adequately protected against all forms of storm damage, including wind and flooding. The insurance industry plays a crucial role in this, offering not only financial support but also encouraging better preparation and resilience for future extreme weather events.
As the recovery from Hurricane Milton begins, the lessons learned from this and previous storms will help shape a more resilient future for Florida and other vulnerable coastal regions. For now, the focus remains on providing support and aid to those affected, and ensuring the region can rebuild stronger and better prepared for the next storm.
Krone Weidler, Founder & Principal
Cadre Healthcare Realty Advisors
1095 SE 177th Place, Suite 404-M14
Summerfield, FL 34491
C: (813) 842-2365
O: (866) 355-3594
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