Oct 7, 2022 - Energy & Environment

Hurricane Ian may have caused $67 billion in damage, a top 5 U.S. storm

Damage in Florida from Hurricane Ian as viewed from the air.

Damaged homes from Hurricane Ian in Sanibel, Fla., on Sept. 29. Joe Raedle/Getty Images

Hurricane Ian likely caused $53 billion to $74 billion in insured losses from Florida to the Carolinas, with a "best estimate" of $67 billion, according to new data released today from modeling firm RMS.

The big picture: These preliminary damage totals would make Hurricane Ian the costliest storm in Florida history and second nationally to Hurricane Katrina when adjusted for inflation.

  • The storm, which devastated densely populated areas of southwest Florida — including Ft. Myers, Naples and barrier island communities such as Sanibel Island — killed at least 92 people in Florida alone, according to the Associated Press.
  • RMS, which is part of Moody's, also estimated the federal National Flood Insurance Program could see $10 billion in losses from storm surge and inland flooding from the storm.
  • Much of the damage from this storm is from water, with the coastal surge wiping out homes and businesses near the shore, and inland flooding hitting record levels across central Florida in particular.
  • Wind damage was less extensive, likely due to strict building codes in the region, according to Steve Bowen, chief science officer at reinsurance broker Gallagher Re.

By the numbers: According to the Insurance Information Institute, 2021's Hurricane Ida was the most expensive hurricane on record in Florida, with $36 billion in insured losses there.

  • Nationally, 2005's Hurricane Katrina ranked at the top of the list, with about $85 billion in insured losses, when adjusted for inflation using the Consumer Price Index.

What they're saying: "Ian was a historic and complex event that will reshape the Florida insurance market for years to come," said Mohsen Rahnama, chief risk modeling officer at RMS, in a statement.

  • Bowen, who is currently surveying damage in Florida, said the damage from the storm surge has beaten his expectations. "The good news is that newer constructed buildings in many communities seemed to have performed very well given the intense wind speeds," which he chalked up to strict building code standards.

Yes, but: Bowen cautions that final loss numbers won't be known for many months.

  • "Given the anticipated volume of storm-related litigation to come, everyone needs to be mindful of the ongoing financial uncertainty and that numbers are going to evolve for many months to come. If not longer," he said.
  • "There is no question that Ian will go down as one of the costliest U.S. natural catastrophe events on record, and one of the most expensive for the insurance industry. Where it finally lands on the Top 5 list? TBD."

Context: Hurricanes are becoming more intense, undergoing more episodes of rapid intensification and are delivering more rainfall due to human-caused climate change.

  • This may drive a future escalation in storm losses, though so far damage trends are dominated by the huge influx of people moving to vulnerable areas.
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