Ian ‘largest hurricane loss’ in Florida history, insured losses over $60bn

Hurricane Ian, which made a landfall with near Category 5 strength last week, will be the “largest hurricane loss in Florida history”, with total economic damage reaching well over $100 billion and insured losses hitting close to $63 billion, catastrophe modeler  Karen Clark & Co. (KCC) has said.

Ian began as a tropical depression in the Central Caribbean Sea on September 23 before rapidly intensifying and making landfall near La Coloma, Cuba as a Category 3 hurricane on September 27. After crossing Cuba, Ian again intensified rapidly just off the coast of southwest Florida with peak winds increasing from 120 mph to 155 mph (almost Category 5) in less than 10 hours.

It made landfall in Florida on September 28 near Cayo Costa with 150 mph winds. Hurricane Ian made a second US landfall near Caines on September 30 as a Category 1 hurricane with 85 mph winds.

Analysts believe Ian will be a “challenging storm for insurers due to the tremendous amount of coastal flooding and the unique nature of the Florida market with respect to a likely high proportion of litigated claims.”

KCC estimates that the privately insured loss from Hurricane Ian will be close to $63 billion, with $200 million in the Caribbean and the rest from wind, storm surge, and inland flood losses in the US.

The figure includes insured loss to residential, commercial, and industrial properties and to autos, as well as building, contents, and time element losses. Other privately insured losses from wind, storm surge, and inland flooding are also accounted for in the sum, alongside estimated demand surge and estimated impacts of excess litigation in Florida.

Excluded in this estimate are NFIP losses, damage to boats and offshore properties, uninsured flood and wind losses.

It is assumed that some flood damage will be paid by insurers even if not explicitly covered, KCC has noted.

Overall, the total economic damage will be well over $100 billion, it warned, including uninsured properties, damage to infrastructure, and other cleanup and recovery costs.

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