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Property Damage from Ian May Exceed $60B; Home Insurance Rates May Climb Another 40%

WQCS file
The Insurance Information Institute projects that Ian will end up being the second-largest property loss event in U.S. history after Hurricane Katrina in 2005.

Florida - Monday October 3, 2022: Hurricane Ian is going to have a profound long-term impact on the Florida home insurance market, which was already in crisis. More Florida home insurers could go bankrupt, and home insurance rates are likely to surge, according to the spokesman for The Insurance Information Institute.

The Institute's Communications Director, Mark Friedlander, says they project that Ian will end up being the second-largest property loss event in U.S. history.

“We are projecting losses in excess of $60-billion dollars which will make it second only to Hurricane Katrina in 2005," said Friedlander. "In fact, other than Hurricane Katerina, there has never been another hurricane loss higher than $36-billion dollars.”

Covering that damage, he says, raises concerns about the few remaining regional, under-capitalized insurers who are still selling polices in Florida. “27 of those companies are currently on the Florida Insurance Regulator’s watch list because of financial concerns. It is certainly possible that some of those companies could fail because of the expense, (and) pressures of Hurricane Ian.”

Because so much damage was done by flooding, not winds, that may leave many homeowners out to dry because standard home owners’ insurance doesn’t cover flooding. "Unfortunately, only about 18% of Florida homeowners have a flood insurance policy. We see much higher rates on coastal areas. But, for example, central Florida, we saw catastrophic flooding, we only see very small take up rates for flood insurance there, roughly 5%. So, if you don’t have flood coverage, you have a big problem financially.”  

And all homeowners, across the state, can expect their property insurance rates to surge again next year, he said. "Floridians currently pay the highest home insurance rates in the country at $4,231, nearly triple the U.S. home insurance average. We expect home insurance rates to continue to escalate in Florida and it would not surprise us if we see and average rate increase of 40% or more across the state next year.”