TALLAHASSEE — Contrary to analysts’ expectations, state officials are confident Hurricane Milton will not have a devastating impact on Florida’s recovering insurance market.
The state is still assessing the damage caused by the Category 3 storm, which left at least four people dead, but property damage appears to have been less severe than many expected.
“A once-in-a-lifetime catastrophe appears to have been largely averted,” Insurance Regulatory Authority Commissioner Mike Jaworski said in a statement Thursday.
He also pointed to recent reforms, such as making it harder for insurance companies to sue, adding that “the market is well-positioned to effectively weather the effects of these storms.”
On Wednesday, rating agency AM Best wrote that Milton “poses a significant threat to Florida’s property and casualty insurance market,” in part because of furniture left outside after Hurricane Helen two weeks ago. and other debris could become destructive airborne projectiles. So far, that threat has hardly materialized in Tampa Bay.
Wall Street analysts predict the storm could result in insured losses of between $50 billion and $175 billion, Barron’s reported. The amount could crush some of the smaller insurers that dominate the Florida market, leading to further instability and future premium increases.
Asked about those predictions Thursday morning, Gov. Ron DeSantis flatly denied them.
“How could Wall Street analysts know that? It was dark all day long,” DeSantis said. “Please let us take a break on this matter.”
Before Mr. Milton, concerns were also raised about the impact on state-run Citizens Property Insurance, Florida’s largest insurer with about 1.2 million homeowners policies.
About 20% of these insurance claims occurred in Sarasota, Manatee, Pinellas and Hillsboro, representing about $88 billion in damages for residents of the counties within the expected storm range.
If Citizens doesn’t have the money to pay the claim, it can collect the money by imposing an appraisal on all insurance policies, from car insurance to pet insurance. But after Mr. Milton, that won’t be necessary, Michael Pelletier, a spokesman for the civic group, said in a statement Thursday.
“The public is in a strong financial position and can meet all claims without additional fees or assessments,” Pelletier said.
Homeowner’s insurance covers damage from wind, fire, leaks, theft, and other issues, but not damage from flooding. This damage is covered by the federal National Flood Insurance Program or private flood insurance.
This is the main reason why Hurricane Helen, which caused massive flooding in Tampa Bay, was expected to be a “manageable event” for Florida’s insurance companies. That differentiation may also play a role in dealing with damage from Milton.
Florida’s insurance market has experienced booms and busts since Hurricane Andrew upended the insurance industry in 1992.
The latest crisis began after the state ended a decade of major hurricane drought in 2017. Since then, insurance premiums have skyrocketed and companies have retreated or gone out of business.
The main response from Republican lawmakers and DeSantis has been to make it harder to sue insurance companies.
The market is starting to stabilize, and many companies are calling for no rate hikes or small rate cuts this year. On Thursday, regulators announced that USAA was “reaffirming” its commitment to operating in the state.
But homeowners insurance has not been significantly reduced, putting pressure on lawmakers who say property insurance remains a top issue for voters.
On Wednesday, state Rep. Chip LaMarca, R-Broward County, posted on X that he intends to work with lawmakers in hurricane-hit areas to “fundamentally change the face of insurance in Florida.”
“I don’t care what the solution is, but I want to find a solution for all Floridians,” he wrote. “We have to fix that.”
Those who need to file a Citizens claim can do so through the myPolicy customer portal or by calling Citizens at 1-866-411-2742.
• • •
5 things to know about the 2024 hurricane season, according to forecasters.
Forecasters predict the 2024 hurricane season will be “very active.” Here’s why:
Could Tampa Bay flood insurance go up in value after the hurricane? Warning from Hurricane Ian
Want to know which areas of Tampa Bay are flooding? Here’s where to look.
A checklist for building any kind of storm kit.
