Hurricane Milton has left Florida counting its losses, with at least 15 deaths reported and extensive damage across the state.
Although the storm was not as intense as meteorologists initially feared, it has sparked serious concerns about the state’s insurance industry and who will foot the bill for reconstruction.
The BBC Fact Check team reviewed the posts and stated that Hurricane Milton is one of the strongest storms in modern U.S. history and was
— ✨د.أم عبدالله✨ (@NumAbdullah) October 12, 2024
1#flwx #Florida #HuracanMilton #Milton #miltonhurricane #MiltonFlorida pic.twitter.com/hB5ldkhblO
Early estimates of the damage costs range from $50 billion in the best-case scenario to over $100 billion in the worst case.
The burden is expected to fall heavily on insurance companies and the state-run insurance provider, which also acts as a reinsurer for private insurers unable to cover their losses.
The double impact of Hurricanes Helene and Milton within weeks has created unprecedented turmoil in the region’s insurance sector.
Industry executives anticipate a wave of insurance company bankruptcies and a potential “mass exodus” of major private insurers from Florida, viewing it as a high-risk, low-return market.
This could lead to a significant increase in insurance costs for residents.
Florida is already considered a high-risk area for insurers, with 78 of the 80 most high-risk postcodes in the United States.
The state-run Citizens Property Insurance Corp, established in 2002, is likely to bear the brunt of the costs.
It currently insures over 1.2 million policyholders and has access to state funds to cover both its own clients and those of bankrupt private insurers.
#PigMillie 👍👍#miltonhurricane https://t.co/nb16lnh7bP
— DöpDöpiIsmus (@DopIsmus84788) October 12, 2024
Since 2003, 41 insurance companies have gone bankrupt in Florida, compared to 37 in the rest of the country combined.
This has led to stricter payout policies, with the six largest insurers operating in Florida rejecting 50% of claims last year, often citing policy loopholes.
The average Florida property owner pays $4,060 annually in insurance premiums, about $1,000 more than in any other US state, excluding separate flood coverage.
This has led some homeowners to forgo insurance altogether, with approximately one in 13 property owners in the US uninsured.
The situation has prompted discussions about potential federal government intervention, with President Joe Biden indicating willingness to consider a bailout for Florida if necessary.
Analysts warn that Hurricane Milton could “completely exhaust” some of the largest insurers, derailing their catastrophe budgets for 2024.
In recent years, reinsurers have been increasing their premiums by nearly 50% annually, raising concerns about the long-term sustainability of Florida’s insurance market in the face of increasingly frequent and severe weather events attributed to climate change.
(information from protothema.gr)
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