Verisk puts $30-50bn insured loss range on Milton

The Extreme Event Solutions group at Verisk has estimates that insured industry losses to onshore property for Hurricane Milton will fall between $30-50bn.

The majority of the insured loss is attributable to wind, Verisk said.

The estimate includes losses from wind, privately insured estimates of storm surge, and privately insured precipitation induced flood losses resulting from Milton’s landfall in Florida.

“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,” Verisk said.

“Also, Verisk’s modeling of both storms indicates 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,” the technology firm added.

Included in its 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 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,” Newbold added.

Damage interaction

Helene and Milton impacting Florida back-to-back over such a short time period could have some impacts on loss development and settlement for both storms, Verisk claimed.

Only Ivan and Jeanne in 2004 hit Florida as major hurricanes over a shorter period than Helene and Milton going back to 1851.

One challenge that is likely to arise is over the attribution of loss to each event, Verisk suggested, noting that 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,” Verisk said.

“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 cat modeller said.

“There are numerous images and reports of massive debris left outside properties, on the streets which could have further exacerbated damage from Hurricane Milton by acting as projectile sources, despite efforts to clean up before Milton’s arrival,” Verisk added.