Milton insured damage projections are in: it starts at $30 to $50 billion

With Hurricane Milton — finally — here and gone, the question for many in the business community across the region is simple, with a sort of complicated answer: outside the human toll, what will Milton cost? 

One report, from Fitch Ratings, estimates Milton losses will range from $30 to $50 billion, which puts it around the total cost of Hurricane Ian in 2022, which made U.S. landfall in Lee County and caused $54 billion in losses. That would make it a top three hurricane in the U.S. in total losses, trailing Hurricane Katrina in 2005, which caused $65 million in damage, or $101.86 million in 2023 dollars, according to the Insurance Information Institute.  

While $50 billion is obviously a big number, analysts at Morningstar DBRS say if Milton made landfall in more densely populated Tampa, rather than where it did, on Siesta Key, the total costs would have ranged from more like $60 billion to $100 billion. 

Or even higher. 

Analysts at Jefferies, according to a report from Business Insurance, estimate a mid-double-digit billion dollar insured loss would follow a major hurricane impact in one of Florida’s most heavily populated regions. “A 1-in-100 year event is estimated by some to result in $175 billion in losses for landfall in the Tampa region, and $70 billion in losses in the Fort Myers region,” Jefferies analysts say, according to Business Insurance. 

Florida insurance market share, 2023; commercial lines

SOURCE: Fitch Ratings

Even the lower Fitch $50 million figure is subject to go higher. Ultimate losses, Fitch projects in its note, “will also depend on demand surge, as Milton follows closely on the heels of Hurricane Helene, a Category 4 that devastated the Southeast U.S. two weeks earlier. Higher demand and limited supply of labor and materials needed to adjust claims and repair/rebuild following multiple large-scale disasters can increase insured losses by 20% or more.”

Beyond the costs merely for Milton, there are other factors at play for the Florida insurance market. Consider these ominous projections from the Oct. 10 Fitch report: 

• “Insurers remain exposed should an additional storm or storms hit Florida this hurricane season.” (Hurricane season ends Nov. 30.) 
• “The Florida homeowners’ insurance market’s precarious position will weaken further with the destruction generated by Milton.”

The analysts add that the “heightened level of catastrophe losses likely limits any potential for rate declines in property catastrophe business in 2025 as (re)insurers maintain underwriting discipline.” In other words: Florida insurance rates, which in some places were stabilizing after massive increases, are likely to go up. Again.   

An Oct. 9 commentary from A.M. Best backs up that point, particularly in reinsurance. “After a relatively calm renewal season in 2024 — especially compared with the far more tense January 2023 renewal season, which was marked by rate increases, higher retentions demanded of primary insurers and constrained capacity — Hurricane Milton,” the report states, “will likely stall any softening of price and terms in the property reinsurance market.”

The A.M. Best report projects that the Florida insurance market, after absorbing Milton into pricing models, could then be staring at another issue: capacity. “The hard reinsurance market, possible local insolvencies and declining capital among insurers concentrated in Florida will significantly pressure the Florida property market,” the commentary states. “Citizens Property Insurance Corp. has been making concerted efforts to depopulate its book. However, any cutback in capacity among other insurers will only add to the number of property owners covered by Citizens.”

Florida insurance market share, 2023; personal lines

SOURCE: Fitch Ratings