Hurricane Milton is estimated to have caused total insured losses of between $17 billion and $28 billion, CoreLogic has said, with this figure including losses to the NFIP, bringing the firm’s estimate in towards the lower-end of those seen so far.
Coastal flood losses are seen as likely to be at their highest in Sarasota and areas to the south such as Naples and Ft. Meyers, while precipitation-induced inland flood losses are expected primarily in the Tampa Bay area.
The total amount of damage from hurricane Milton, including losses to uninsured property, is estimated to be between $21 billion and $34 billion, according to CoreLogic.
The insurance market loss estimate is based on damage to buildings, contents, and business interruption for onshore residential, commercial, and industrial property, while the flood component includes both storm surge and precipitation-induced inland flooding and importantly included in the $4 billion to $6 billion of flood losses is an estimate for the National Flood Insurance Program (NFIP).
At that level, if the estimate proves correct, it is unlikely even the lowest level of reinsurance backing the NFIP, which is its riskiest tranche of the FloodSmart Re catastrophe bonds, would attach.
One important distinction between CoreLogic’s estimate and some others is that it does not include any insured losses from the tornado outbreak that affected parts of Florida as hurricane Milton neared its landfall.
Once we include this new CoreLogic estimate into all those we’ve seen or received so far, it takes the low-end average to just below $25 billion, the mid-point to $35 billion and the upper-end to $45 billion.
The NFIP is only explicitly factored into two of the estimates and if we back that out the averages come down to $24 billion to $44 billion, with a mid-point of $34 billion.
“Hurricane Milton was an unusual storm, causing unexpected wind and flood conditions across the state of Florida. As Hurricane Milton neared landfall, it interacted with the jet stream over the southeastern U.S. causing the winds on the northern and northwestern sides of the hurricane – generally known to be weaker – to be atypically strong,” Dr. Daniel Betten, Director of Forensic Meteorology at CoreLogic said. “To add to the complexity, weather gauges in coastal Florida also measured hurricane force winds over Sarasota south of where Milton made landfall, essentially creating two distinct lanes of damaging, hurricane-force winds.”
“Given the large concentration of property in the Tampa Bay area, including older residential and high-value commercial structures, large insured losses were possible,” added Tom Larsen, Associate Vice President Hazard & Risk Management at CoreLogic, who is currently on the ground in Florida analyzing damage. “However, what we are seeing is less than expected wind damage and very little storm surge flood damage, especially in the population centers of the Tampa Bay area.”
Finally, CoreLogic also warns that because Milton came soon after hurricane Helene and damage was seen in the same regions with both storms, it means for the insurance and reinsurance industry “difficult loss attribution between the two storms”.
The company cautioned that, “The overlap of severe storm surge damage in the Tampa Bay area during Hurricane Helene and possible wind damage during Hurricane Milton creates a scenario where leakage into wind-only policies is possible.”
Read all of our hurricane Milton coverage.
