Hurricane Milton Might Be the Costliest Hurricane Since Katrina

As Hurricane Milton makes landfall, Florida prepares for catastrophic damage.

The massive storm is expected to cause anywhere between $60 billion and $100 billion in insured losses. That would make it the most devastating hurricane since Katrina bulldozed New Orleans in 2005, and one of the costliest natural disasters in US history. Insurers are going to buckle under its weight.

‘Extremely Dangerous’

Experts are being extremely direct about Milton’s power: The National Hurricane Center is calling it “an extremely dangerous major hurricane,” and the head of FEMA is calling it a “deadly and catastrophic storm.” 

The resulting damage is likely to stress both commercial insurers — who have already hiked premiums in many regions in Florida, while abandoning others altogether — as well as the state-run insurance system established to fill in the gaps:

• Credit-rating agency Morningstar DBRS projects that insured losses could mount to $100 billion, while BMO analyst Michael Zaremski says the stock market has priced in around $75 billion in insured losses.
• Citizens Property Insurance Corporation, the not-for-profit insurer established by the state in 2002, said in July it had $14.4 billion on hand to pay claims, though a spokesperson reiterated this week that the insurer “will always be in a position to pay claims.”

Hurricane Season: It’s enough to “likely make a dent in insurers’ profitability,” Morningstar said. Making matters worse, of course, is that much of the region in Milton’s path is still recovering from the damage wrought by Hurricane Helene just last week. That storm likely caused private market insurance losses of around $11 billion, Moody’s estimated.