Hurricane insurance losses from Hermine won’t hurt the industry

hurricane season insurance losses storm

The storm that made landfall in Florida on Friday certainly left damage behind, but nowhere near the worst.

When Hermine made landfall in Florida, it left the first hurricane insurance losses seen in the state since 2005. While there were concerns that it would strengthen significantly, but fortunately the worst case didn’t happen.

Hurricane Hermine left hundreds of thousands without power while flooding certain areas.

Industry analysts have taken a look at the initial damages and have predicted that hurricane insurance losses won’t be crippling to property insurers. While the cost of repairs won’t be light, it should be well within the manageable level for insurance companies. The reason is that even with the strengthening of the storm, it did not become a powerful upper level hurricane.

Moreover, the hurricane insurance losses were kept low because coverage was not high where the storm struck.

hurricane insurance losses stormThe areas in Florida that were most affected by the storm when it made landfall were of lower population than others. For example, because the storm aimed for the northwestern part of the state, it missed higher population locations such as Miami-Dade, Broward and Palm Beach counties.

These predictions from the insurance analysts were not meant to downplay the flooding and power failures experienced by hundreds of thousands. However, it did underscore the fact that it may have been a great deal worse if areas of larger population had been affected. The costs and disruptions, comparatively, are notably lower for the majority of Floridians.

While it remains too early to come up with an accurate figure in terms of the actual amount of insured damage from the storm, the insurance industry is confident that it is well within manageable levels.

The last time the state experienced hurricane insurance losses in Florida was in October 2005 when Wilma made landfall. This represents a remarkably long period of time for the state to go without being affected by hurricane damage. It is particularly interesting as Florida is traditionally the state that receives more of these severe storms than any other. Historically, two out of every three hurricanes have made landfall in the state.

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