Verisk: Milton insured losses between $30bn and $50bn

Risk modeller Verisk  has estimated that industry losses to onshore property from Hurricane Milton will be between $30 billion and $50 billion. 

The company said the estimate included losses due to wind, privately insured estimates of storm surge and privately insured precipitation-induced flood losses resulting from Milton’s landfall in Florida. The majority of the insured loss is attributable to wind. 

Milton rapidly intensified into a Category 5 storm and recorded the fifth lowest pressure of any Atlantic hurricane ever record on October 7. It made landfall on October 9 as a Category 3 storm but increased windshear saw it produce multiple tornadoes. 

“Several of these tornadoes caused structural and roof damage to buildings in populated areas like Fort Myers on the Gulf Coast and Vero Beach on the Atlantic Coast,” Verisk said. 

It reported up to 18 inches fell in St Petersburg and Milton caused structural damage in Tampa and St Petersburg. 

 “Milton’s wobbling track ultimately steered the system south of Tampa, making landfall in Siesta Key and South Sarasota around 8.30pm as a Category 3 hurricane per the NHC,” Verisk said. “Despite the storm’s major hurricane status, the highest measured maximum sustained wind over land was 78 mph, or low-end Category 1 strength, in Venice. A few locations reported gusts of over 100mph. 

“Areas south of the landfall point experienced significant to catastrophic levels of storm surge from Milton. For example, the storm surge exceeded 10 feet in Sarasota and 5 feet in Fort Myers.”

 In common with other modellers, Verisk noted that the short time period between Hurricane Helene and Hurricane Milton “could have some impacts on loss development and settlement for both storms”.

“One challenge that is likely to arise is over the attribution of loss to each event. Areas around Tampa Bay, south to Siesta Key, and along the coast due south toward Fort Myers were all impacted by both storms. The area south of Tampa saw significant storm surge from both events. 

“In addition to claims settlement challenges, the back-to-back coastal flooding events could lead to aggregate flood limits being reached in some cases. One aspect that is unique when it comes to Hurricane Milton is the debris pile up and non-removal of the same following Hurricane Helene which impacted some of the same counties along the Gulf Coast a few weeks ago.”

“The US is once again faced with recovering from a devastating hurricane that tragically took the lives of many individuals,” said Rob Newbold, president of Verisk Extreme Event Solutions. “We are committed to learning from these events to support the safety, security and resilience of the people and communities affected, and of others across the world.” 

It should be noted that while Milton is expected to have a significantly higher insured loss tally than Helene, the difference between the events insured losses is driven in large part by the lower take up rates on flooding in areas impacted by Helene, particularly inland areas impacted by precipitation-induced flooding. 

 Also, Verisk’s modelling of both storms indicated that the overall levels of damage between the two events are comparable but given much higher proportion of loss due to wind from Milton, a far higher percentage of the potentially insurable loss will be paid out by the insurance industry. 

 Included in the industry insured loss estimate are losses to onshore residential, commercial, and industrial properties and automobiles for their building, contents, and time element coverage, as well as the impact of demand surge.  The estimate does not include losses paid out by the National Flood Insurance Programme, losses to infrastructure and economic losses. 

Verisk’s estimate is comparable to other recent estimates from modelling companies. 

Karen Clark & Company’ estimated the privately insured losses would be $36 billion, including wind, storm surge, inland flooding, and privately insured damage to residential, commercial, and industrial properties, vehicles, and business interruption, but it excluded boats, offshore properties, and NFIP losses.

Moody’s RMS estimated the combined losses of Milton and Helene would be between $35 billion and $55 billion, having previously estimated insured losses from Helene at $8 billion to $15 billion. That suggests it estimated Milton losses at between $27 billion and $40 billion. It expects to release its final estimate for Milton by the end of the week.