How Florida Insurers Are Prepared for Another Major Hurricane This Season

Florida Insurers' Financial Strength Amidst Hurricane Threats

Despite warnings from two leading insurance rating agencies that Hurricane Milton weakened or threatened Florida’s recovering home insurance market, the market “can manage losses” from the Category 4 storm “and are ready to cover yet another hurricane,” if one should come this season, according to industry experts who spoke with the South Florida Sun Sentinel.

Reinsurance Capital and Sophisticated Tools

While cautioning that loss estimates haven’t been released yet from catastrophe modelers, Florida market experts said the state’s insurers have sufficient reinsurance capital to weather not only hurricanes Debby, Helene, and Milton but another Milton-sized storm if one emerges during the latter portion of the 2024 Atlantic season.

State Legislative Reforms and Market Stability

“The market is in its best financial condition in many years due to state legislative reforms in 2022 and 2023 that addressed the man-made factors which caused the Florida risk crisis – legal system abuse and claim fraud,” Friedlander said. “Florida residential insurers also have adequate levels of reinsurance to cover catastrophic loss events like Milton.”

According to the Insurance Information Institute (Triple-I), the estimated insured losses from Hurricane Ian, a Category 4 major hurricane that made landfall in Southwest Florida in September 2022, were between $50 billion to $60 billion. This included up to $10 billion in litigated claims due to one-way attorney fees that were in effect at the time of the storm. In contrast, the expected losses from Hurricane Milton are anticipated to be significantly lower, reflecting the improved financial stability of Florida's insurance market.

For homeowners in Florida, it is crucial to ensure that their insurance policies are up-to-date and comprehensive, covering all potential risks associated with living in a hurricane-prone area. Regularly reviewing and updating your insurance coverage can help protect your home and financial stability in the event of a natural disaster.