Early estimates show Florida insurance costs for Hurricane Idalia
Some companies are estimating the state will suffer billions of dollars in insured losses due to the storm, but an experts says it's much too early to determine final numbers and effects.
Some early estimates regarding Hurricane Idalia's potential costs in insured damages published Thursday, just one day after the storm left Florida.
UBS bank reported the storm could present another $9.36-billion hit in insured losses for the state. This was an average of the estimate, with the low end being $4 billion and the high end $25 billion.
The report stated this comes as Florida's property insurance market is still recovering from the last three consecutive years of storm damages and claims, which have totaled up to more than $1 billion in underwriting costs alone.
Lisa Miller, the former Florida Deputy Insurance Commissioner and now the CEO of Lisa Miller & Associates, her own business development and consulting company, said it is much too soon to predict final costs but that she feels optimistic about the future of insurance in Florida.
“The estimates of Idalia’s damage are just that — they’re estimates," Miller said. "We won't know the insured losses for several weeks or months but this insurance industry is strong and resilient, (...) and I think we’ll be just fine."
When asked if another batch of expensive repairs would mean bad news for policyholders' claims, Miller said Florida has the best insurance commissioner in the country.
According to Miller, the insurance commissioner is responsible for overseeing and regulating insurance companies and their business practices.
"His No. 1 priority is to ensure that insurance companies have the money to pay their claims. That's his job, and he does a great job at it," she said.
Another concern is that these new losses will incur a hefty bill on insurance companies, and that these will pass the expenses over to consumers.
According to the Insurance Information Institute, Florida has the highest homeowners' insurance rates in the U.S. The state's premium average of $6,000 a year for 2023 far exceeds the national average of $1,700. Since last year alone, insurance rates in Florida increased by 42%.
Miller said that while any speculations are premature, she believes the industry might balance out this year.
“I think the rate increases of the past two to three years, 30 to 40%, will not be as severe in 2024. I think they’ll moderate slightly, and we might see 10 and 15% rate increases. So, I think we’ve just made the turn. I'm very optimistic," she said.
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