Hurricane Melissa losses could top $4.2bn

Global data analytics and technology provider to the insurance industry Verisk has estimated that industry insured losses to onshore property in Jamaica from record setting Hurricane Melissa will likely range between $2.2 billion and $4.2 billion.

The risk modeller said the industry loss range includes estimated wind and precipitation-induced flood damage from Melissa’s track across Jamaica, with most of the modelled loss attributable to wind.

According to a statement, Melissa set a record as the most intense hurricane to make landfall in Jamaica and tied for the most intense hurricane to make landfall globally since recordkeeping began in 1851. It was also the most intense storm of 2025 and is third only behind 2005 Hurricane Wilma and 1988 Hurricane Gilbert for lowest minimum central pressure in an Atlantic hurricane.

Damages and losses, said Verisk, were seen over a wide-spread area. It put the damage incurred in perspective from the context of building codes.

The residential building inventory in Jamaica is dominated by masonry construction at almost 70 percent and approximately 30 percent are wood framed buildings. Roofs are mostly low to pitched flat and the construction practices are informal with minimal to almost no professional input.

The risk modeller said that under these circumstances, significant damage and, in a number of cases, near total destruction of buildings is expected in the landfall area when a Category 5 hurricane brings 185 mph winds, such as those from Hurricane Melissa.

It continued that many neighbourhoods in St. Elizabeth parish, where Melissa made landfall, including Black River, Barbary Hall and adjacent areas are reporting significant damage with 80-90 percent and in certain cases 100 percent of roofs destroyed.

Non-engineered residential buildings and engineered commercial buildings experienced similar degrees of damage. From residential homes to commercial buildings including grocery stores, gas stations, airports and hospitals, buildings serving a variety of functions were impacted and saw significant damage. While wind and wind driven rain caused widespread damage, many neighbourhoods experienced precipitation-induced flood damage as well.

Major damage from wind, storm surge and precipitation-induced flooding was also reported in northwest Jamaica in Montego Bay. This area is a popular tourist location and includes resorts which sustained major damage following the storm. While wind played a major role in influencing damage in Western Jamaica, many reports of flooding were reported in eastern Jamaica as far east as Kingston which is the capital and the population centre on the island.

Given the significant amount of wind damage seen along the path of Hurricane Melissa, according to Verisk, it is important to put this damage in perspective with building codes in Jamaica. The first building code in Jamaica known as Kingston and St. Andrew Building Act dates back to early 1900 and was mostly a legal document describing the building regulation and governance in the region.

Fast forward to 1985, the Organisation of Eastern Caribbean States (OECS) published the Caribbean Uniform Building Code (CUBiC) which provided wind design force requirement for several Caribbean islands including Jamaica and was potentially used by some engineers for design and construction of buildings in Jamaica, although it was not legally mandated.

In 2003, the Jamaica Institute of Engineers developed Jamaica’s first National Building Code which was an application document to the 2003 edition of the Uniform Building Code (UBC) with necessary adjustments and commentary to meet the needs of Jamaica’s built environment and hazard characteristics.

The application document included a basic design wind speed map for Jamaica to facilitate engineers to properly design buildings for wind forcing. The basic design wind speeds for areas such as Black River and Montego Bay which bore the brunt of Hurricane Melissa’s winds were set to 130 and 125 miles per hour (3-sec gust), respectively. The winds that these areas experienced from Hurricane Melissa exceeded some of the design winds in these areas and therefore significant damage to the built environment should be expected.

While Jamaica’s National Building Code was initially not legally enforced, the passing of Jamaica’s Building Act in 2019 is expected to improve the enforcement and rigorous application of this building code and enhance the resilience of Jamaica’s built environment moving forward, particularly given the magnitude of damage inflicted by Hurricane Melissa.

Significant uncertainty exists in the insurance take-up rates in Jamaica. The residential take-up rates in the country are less than 20 percent (as per a 2025 report from the Insurance Association of Jamaica) and a significant portion of these insured properties are underinsured. A significant portion of commercial and automobile lines are also uninsured.

Verisk’s loss estimates do not include losses paid out by any sovereign or government protection programmes; losses from Melissa’s interactions with Cuba, Haiti, the Bahamas, or Bermuda; explicitly modelled losses from coastal storm surge; losses to inland marine, ocean-going marine cargo and hull, and pleasure boats/yachts; losses to uninsured properties; losses to infrastructure; losses from extra-contractual obligations; losses from hazardous waste clean-up, vandalism, or civil commotion, whether directly or indirectly caused by the event; loss adjustment expenses; or the impact of demand surge.

History of Melissa

Melissa became a hurricane on October 21. Exceptionally warm sea surface temperatures and low wind shear ignited a period of rapid intensification on October 25. After turning to the north-northeast, the system later strengthened further, with maximum sustained winds of 185 mph and a minimum central pressure of 892 mb as it began its final approach to Jamaica on October 28. That afternoon, the storm made landfall at its peak intensity near New Hope in Westmoreland Parish in Jamaica.

The hurricane weakened inland over the mountains and emerged off Jamaica's north coast at Category 4 strength, headed toward Cuba. The hurricane made landfall in eastern Cuba on October 29, and the system then weakened further to Category 1 strength, while beginning to accelerate toward the northeast, passing near Long Island in the Bahamas.

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