Total economic damage from Ian to breach $100 billion, says KCC

KCC estimates that the privately insured loss from Hurricane Ian will be close to $63 billion, with $200m in the Caribbean and the rest from wind, storm surge, and inland flood losses in the US.

The US figure includes:

• Insured loss to residential, commercial, and industrial properties and to autos
• Building, contents, and time element losses
• Privately insured loss from wind, storm surge, and inland flooding
• Estimated demand surge
• Estimated impacts of excess litigation in Florida

The US figure excludes:

• NFIP losses
• Boats and offshore properties
• Uninsured flood losses
• Uninsured wind losses (eg loss under deductibles)

Hurricane Ian will be a challenging storm for insurers due to the tremendous amount of coastal flooding and the unique nature of the Florida market with respect to a likely high proportion of litigated claims.

KCC experts model wind, storm surge, and inland flooding separately and then estimate the proportion of each peril that will be covered by the private market.

It is assumed that some flood damage will be paid by insurers even if not explicitly covered.

Over the past few years, KCC experts have analysed the trends in litigated claims in Florida and other states. While legislative and policy changes should help to reduce the proportion of litigated claims relative to Hurricane Irma, the large proportion of properties with both wind and water damage may induce more litigation.

The KCC estimate includes a comparable proportion of excess litigation as occurred in Hurricane Irma.

In nominal dollars, Hurricane Ian will be the largest hurricane loss in Florida history. The total economic damage will be well over $100 billion, including uninsured properties, damage to infrastructure, and other cleanup and recovery costs.