The Category 3 storm – winds of 111-129 mph on the Saffir-Simpson Hurricane Wind Scale – made landfall Aug. 30 near Keaton Beach in the Big Bend region of the Gulf Coast, one of the largest to hit the area in a century. Trees and powerlines were downed amid a 7-foot storm surge that flooded homes close to the coast.
A report from Moody’s Analytics released Wednesday stated that in total, private insured losses are between $3 billion and $5 billion, while the National Flood Insurance Program will see a loss of $500 million.
Preliminary estimates since last Friday have pinned total economic losses in the U.S. at around $20 billion.
In December, state lawmakers passed property insurance legislation Senate Bill 2-A in an effort to quell excessive litigation, a main factor in Florida’s rising insurance costs.
The bill also raised the eligibility threshold for the Citizens Property Insurance Corp., the state-run insurer that was designed to be a fall-back for Floridians who are unable to get insurance elsewhere.
However, Citizens is intentionally priced noncompetitively and is one of the most expensive insurers in the state. A $400,000 policy can cost around $6,000 annually.
Pete Walther, president and CEO of Marsh McLennan Agency’s Private Client Services division, told The Center Square in a written statement that changes need to happen quickly to avert a crisis.
“Hurricane Idalia adds further evidence and pressure on legislators to implement changes that will enable a more resilient insurance marketplace for consumers and insurers,” he wrote. “Traditional regulatory models, which were designed to protect consumers, are now failing consumers at scale and at an accelerating rate.”
Walther added that insurers are abandoning certain markets, because constraints caused by supply chain issues, inflation and increasing climate events are impeding “their ability to achieve rate adequacy.”
“The recent insurer announcements are forcing states like California and Florida to consider more flexible approaches to insurance,” Walther said. “The focus is now shifting from a rate conversation to a capacity conversation, and the states have no choice but to think differently today to enable a stable and reliable insurance market for consumers.”