Hurricane Idalia has made landfall causing flooding and evacuations. The affected areas will now need to assess the damages and start the rebuilding process. Damages in Florida alone are estimated to be as much as $10 billion, leaving insurers on the hook to pay out to affected property owners. Many of the claims will be filed not against a private insurer but with the state’s own insurance entity, Citizens Property Insurance. This insurer of last resort was created after many major insurers pulled out of the state, citing unsustainable risk of future weather events like hurricanes.
As of now, it looks like Citizens Property Insurance has plenty of reserves to cover the cost of rebuilding, but that doesn’t mean there won’t be any negative consequences. Property insurance prices have already skyrocketed in Florida, and they will likely only increase after this event. Hurricane season in the Atlantic generally doesn’t end until November, so there is also a threat that another hurricane could strike again this year and exacerbate the damage. One of the things that lessened the impact on Florida’s properties was the Hurricane taking a path into Georgia and the Carolinas. If more hurricanes and tropical storms start hitting other states in the region regularly, we might see insurers pull out of them as well. Florida is a large and prosperous state, so they have so far been able to shelter their residents from much of the damage of hurricanes, but the same might not be true for other states with much fewer resources to indemnify citizens and rebuild homes.