Still Reeling From Ian, Florida Faces Costs of Hurricane Nicole

Still Reeling From Ian, Florida Faces Costs Of Hurricane Nicole
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Hurricane Nicole hit the east coast of Florida early Thursday morning. The tropical cyclone comes just six weeks after Hurricane Ian devastated the state, leaving Florida residents — and insurers — little time to recover before the onslaught of a second natural disaster.

Nicole, a Category 1 hurricane, brought 75 mph winds, storm surge and heavy rainfall when it came ashore in Florida. Parts of South Carolina and Georgia also felt effects of the storm, which is forecast to impact areas as far north as Maine over the weekend, according to the National Weather Service.

Florida hasn’t yet recovered from Hurricane Ian, a Category 4 hurricane that slammed the state’s Gulf Coast on Sept. 28. Its impact is still being assessed, but Ian was quickly labeled one of the costliest storms the state has ever seen, according to the National Oceanic and Atmospheric Administration’s National Centers for Environmental Information.

RMS, an analytics firm that performs catastrophe risk management, estimated Hurricane Ian caused between $53 billion and $74 billion in damage to privately insured property across Florida, Georgia, North Carolina, South Carolina and Virginia. On top of private insurance losses, RMS estimated another $10 billion in flood damage that would be covered under the National Flood Insurance Program.

Additionally, the Federal Emergency Management Agency has paid more than $2 billion in grants, disaster loans and flood insurance payments to aid in recovery from Hurricane Ian, according to a Nov. 7 news release from FEMA.

Impact on Florida’s troubled home insurance market

At the time of Ian’s landfall, Florida’s homeowners insurance industry already was facing a crisis: Floridians pay three times more for home insurance than the national average, according to the Insurance Information Institute. Even so, six insurers in the state were declared insolvent this year, making them unable to pay out claims.

With catastrophic losses from Hurricane Ian adding to the existing problem, insurance industry experts worry neither insurers nor Floridians were ready for Nicole. This is only the fourth hurricane since 1851 to come ashore so late in the season, which lasts from June through November each year. The majority of storms that reach land tend to fall between August and October, according to NOAA.

Two storms in quick succession likely will stress all aspects of the recovery process.

Mark Friedlander, Florida-based director of corporate communications for the Insurance Information Institute, says insurance companies tested by Hurricane Ian may not have the capacity to cover damage from another storm.

“We anticipate this will be a worst-case scenario for Florida’s already-reeling property insurance market,” Friedlander says. “While it appears that insurers do have the capacity to pay claims from Hurricane Ian, it’s unknown if they have capacity to pay claims from another hurricane.”

What can Florida residents expect after Hurricane Nicole?

People should expect a slow insurance claims process. From assessing property losses to repairing and replacing damaged property, everything will likely be affected by staffing and supply chain shortages. For example, the national car market has been in a crunch since long before Hurricane Ian crashed through Florida, which could make it difficult to quickly replace a vehicle.

On top of that, only about 20% of claims filed after Hurricane Ian have been paid out, Friedlander said in an email.

Still, people with storm damage should file their claims as soon as possible.

After a claim is filed, homeowners may be in a hurry to complete repairs, but it could help long term to think about materials and design changes that could make a home better withstand future storms, says Mark Misczak, senior vice president and chief operating officer with Tidal Basin, a disaster preparedness consulting firm.

“There are things that are easier to do during the construction phase to make a home more resilient,” Misczak says.

It’s also the time to evaluate hurricane insurance coverage, including flood insurance, even for people who weren’t affected by the latest storms.

“Florida is vulnerable to storms all year long, not just hurricanes,” Friedlander says. “You can have all kinds of catastrophes — you need to be prepared.”

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