FLORIDA – The aftermath of Hurricanes Helene and Milton is still being assessed, and early estimates suggest that the financial impact could be felt by Florida residents in more ways than one.
Experts are warning that beyond the billions of dollars in property damage, flooded vehicles could lead to higher auto insurance premiums as well.
Both hurricanes struck in quick succession, and the damages are expected to result in increased costs for consumers. According to the Insurance Information Institute, the combined wind damage from both storms is substantial, potentially leading to higher insurance premiums in both the property and auto insurance markets.
The projected total wind loss from Hurricane Helene across all East Coast states ranges from $5 billion to $11 billion. Of that amount, around $2 billion in losses occurred in Florida alone. Hurricane Milton, however, caused even more damage, with an estimated $36 billion in wind damage to Florida communities.
While these numbers represent insured losses, insurance companies are likely to pass some of these costs on to homeowners.
Mark Friedlander, a spokesman for the Insurance Information Institute, explained that homeowners won’t see an immediate jump in premiums.
“It has the potential to increase rates based on the volume of loss activity we’re seeing this year,” he said.
However, several factors, including global insurance market reactions and reinsurance renewals, will determine the full impact over the next 9 to 10 months. Typically, reinsurance renewals are submitted around June 1, just before the start of the next hurricane season.
Despite the potential for rising premiums, Friedlander noted that Florida’s property insurance market is in a better position to handle these losses than it has been in years past. He credits recent legislative reforms for helping the industry shore up its finances.
“Our analysis is the Florida property insurance market has improved enough financially to weather this event,” Friedlander said. “Even if we had another storm this year, the industry is in its best financial position in many years.”
Auto Insurance May Be Less Resilient
While the property insurance market may be holding steady, the auto insurance industry could face tougher challenges. According to Friedlander, nearly half of the 120,000 claims filed in Florida so far this year are for flooded vehicles from the two hurricanes. He also noted that the damage isn’t limited to Florida.
Many vehicles were affected in neighboring states, including Georgia, Tennessee, and the Carolinas, particularly from Hurricane Helene.
“We’re probably going to see a large volume of auto losses, and that could be a factor in future auto rates,” Friedlander warned. With auto insurers operating in Florida and across the country, the widespread losses could result in higher premiums for drivers.
Florida’s Insurance Commissioner recently addressed the situation, reassuring residents that the property insurance market remains strong despite the damage from the hurricanes. The good news, he added, is that both Helene and Milton were not as devastating as they could have been.
However, as the true costs of these storms continue to unfold, Floridians may need to brace for potential increases in both property and auto insurance premiums in the coming year.