Losses from hurricanes Ian, Nicole put pressure on Florida’s property insurance market

TALLAHASSEE — Although Hurricane Nicole is battering parts of the East Coast, it won’t hit Florida’s insurance market as hard as Hurricane Ian.

CoreLogic, a real estate information and analytics firm, released an early estimate on Friday that Nicole’s privately insured losses will be less than $750 million. The modeled estimate represented “gross” losses, which typically means insurers would not have to account for the full amount as they are partially protected by replacement coverage known as reinsurance.

Nicole made landfall south of Vero Beach early Thursday as a Category 1 storm before moving up the state as a tropical storm. Category 4 Hurricane Ian, which made landfall in southwest Florida on September 28 before crossing the state, is expected to cause tens of billions of dollars in insured losses.

Related: Agricultural damage from Hurricane Ian could reach $1.9 billion

On Wednesday, the state Office of Insurance Regulation said estimated insured losses of $8.7 billion were reported by Ian, a number that has steadily increased. This number includes property insurance claims and other types of claims, e.g. B. those for car damage.

Though Nicole won’t cause losses as large as Ian, Fitch Ratings released an analysis on Friday that pointed to the combination of storms that continue to put pressure on Florida’s troubled property insurance system.

The rating agency’s analysis focused on state-backed Citizens Property Insurance Corp. and the Florida Hurricane Catastrophe Fund, another government program that provides airlines with relatively inexpensive reinsurance. Fitch said both programs had enough money to meet their commitments from Ian and Nicole, but cited potential longer-term implications.

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When necessary, both programs have the power to collect “ratings” — additional fees for policyholders across the state — to meet obligations. You can also issue bonds.

Related: What Hurricane Ian Could Do For Florida’s Battered Property Insurance Industry

“Citizens and FHCF (the Florida Hurricane Catastrophe Fund) have an obligation to collect emergency assessments or issue bonds when claims and reimbursements exceed liquid assets, including reserves and premium income, until obligations are fully met,” Fitch said in the on his Website published analysis. “Even if FHCF and Citizens don’t have to tap the market this year, they will have used up much of their liquidity, making them more likely to borrow to rebuild liquidity going forward.”

Citizens has estimated it will receive approximately 100,000 claims from Hurricane Ian. The Florida Hurricane Catastrophe Fund estimated in late October that Ian would suffer about $10 billion in losses after entering the hurricane season with $15.8 billion in cash and proceeds from so-called “pre-event” bonds had gone.

Citizens, which was founded as an insurer of last resort, has more than doubled its policy count in the last two years as private insurers have lost customers and, in some cases, defaulted due to financial problems. Citizens had about 1.116 million policies as of November 4.

Gov. Ron DeSantis called a special legislative session in May to try to prop up the insurance system. Lawmakers have taken steps, including providing airlines with $2 billion in reinsurance, but problems linger.

The Legislature is expected to hold another special session in December that will deal with property insurance. New House Speaker Paul Renner, R-Palm Coast, told City & State Florida, a sister publication of The News Service of Florida, that he expects a “pretty solid special session on property insurance.”

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Renner said last week that providing “stability and capacity in the market, which is frankly at risk at this point, will be a priority. We don’t want that to happen where we have people who can only get Citizens policies. We’ve seen Citizens rise dramatically. The issue of market stability and sufficient capacity is therefore task one for the special session. But really 1B, if you will, is to make sure we start the process of taking steps to reduce insurance costs.”

Renner, who will officially take office as Speaker of the House on November 22, warned that lower costs “won’t happen overnight.”

“If we took the magic wand and did everything we didn’t get done during the previous special session so people could agree to reform our market to make it healthy, it still wouldn’t take the cost overnight to reduce insurance premiums. ‘ Renner told City & State Florida. “However, once we build that capacity back up, once we have those additional reforms in place, I’m hopeful that over time those rates will come down and hopefully at some point we’ll actually see a reversal in increases so people can take a break from.” get their insurance premiums.”

Meanwhile, property owners in places like Volusia County are battling damage from Hurricane Nicole. The storm and resulting erosion caused damage to homes, condos, and hotels on the beach, with some buildings toppling into the ocean.

According to a county website, the Volusia County real estate appraiser provided an initial estimate of more than $481 million in damages from Nicole. It will probably be a long time before it is determined how much of the damage is covered by private insurance.

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By Jim Saunders, Florida News Service

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Coverage of Hurricane Ian by the Tampa Bay Times

HOW YOU CAN HELP: Where you can donate or volunteer to help victims of Hurricane Ian.

FEMA: Floridians injured by Ian can now apply for FEMA assistance. Here’s how.

HOW RELIABLE ARE HURRICANE MODELS? Hurricane Ian gave us some answers.

AFTER THE STORM QUESTIONS: After Hurricane Ian, how to get help with downed trees, food, and damaged shelter.

HOUSE CURING: Qualifying Florida homeowners could earn up to $10,000 through the program.

MORE STORM COVERAGE: Brace yourself and stay tuned to tampabay.com/hurricane.