Estimates of the costs imposed by Hurricane Ian are still rolling in. To date, most sources place the cost of Hurricane Ian between $50 billion and $74 billion in insured damages, with the most likely number being somewhere around $67 billion.
These numbers make Ian the most expensive storm in Florida’s history. In the US, they place Ian second only to Hurricane Katrina in insured losses.
What Made Hurricane Ian So Costly?
A combination of factors raised the price tag of Hurricane Ian’s damage. These included:
- Where the storm made landfall. Hurricane Ian struck densely-populated areas in southwest Florida. More buildings in the hurricane’s path meant more damage – and more expenses for insurers.
- Flooding caused a lot of damage. Flooding is one of the costliest insured losses, and it was also a major factor in the damage Ian caused.
- Rebuilding costs were already high due to supply chain disruption. Higher costs for lumber and other construction materials meant higher costs for insurance and building owners, too.
How Will Insurers Respond?
Insurers have learned that they live in a “new normal” for climate-related disasters, and they’re responding accordingly. New methods of analyzing climate and loss data, along with a commitment to more focused underwriting, are resulting in updated policies, new product offerings, and a new approach to coverage.
What Effect May Ian Have on Future Insurance Costs?
Property and casualty insurance costs are likely to rise in the wake of Hurricane Ian for several reasons.
First, catastrophic weather events are becoming more common in the United States. As insurers are called to respond to even more of these events, they also feel pressure to protect their bottom lines in the form of adjusted premiums.
Second, construction materials and labor are likely to remain costly for some time. These costs also impact insurance – and can leave some policyholders underinsured if they don’t update their policy limits to reflect the impact of inflation.
Looking for ways to protect your business from tumultuous weather and climate events?
The team at Odell Studner can help. Get in touch with our team today to learn more about your insurance and other business options.
