Insurers Warn Hurricane Milton May Lead to 'double-digit billion-dollar' Losses in Florida
Insurers expect Milton to be the most destructive “natural catastrophe” in the U.S. this year.
TroibNews 
Hurricane Milton's destructive path across Florida may not have caused the devastation initially anticipated, but it still poses a threat to the state's insurance market, which remains a contentious issue in the nation’s third-largest state.
The storm veered south of the vulnerable Tampa Bay area but unleashed deadly tornadoes and powerful winds across much of the state. As of Saturday, over 1.5 million residents were without power, and the storm has been linked to at least 17 fatalities. Authorities are concerned that the heavy rainfall associated with the storm could lead to flooding in several rivers in the upcoming days.
While it is expected that many private insurers will be able to manage the losses incurred by Milton, the successive impacts of Hurricanes Helene and Milton could produce damages significant enough to undermine the progress towards stabilizing the insurance market that Gov. Ron DeSantis and other top Republicans have frequently touted.
Mark Friedlander from the Insurance Information Institute indicated that insurers are currently awaiting loss estimates, which are anticipated to be substantial. “We anticipate Hurricane Milton will be a double-digit billion-dollar loss event and the largest insured loss for any U.S. natural catastrophe in 2024,” Friedlander noted. “However, we don’t expect Milton will reach the level of Hurricane Ian in 2022, which we estimated as a $50 billion to $60 billion insured loss. Ian is the second-largest U.S. natural catastrophe loss on record behind Hurricane Katrina.”
Reports from insurers are just beginning to emerge in the wake of Milton, with Florida insurance regulators noting that more than $586 million in losses have already been reported from nearly 44,000 claims.
Florida's insurance market was on the brink of collapse a few years ago due to a combination of factors, including a series of storms and what insurers described as excessive lawsuits against them. Several insurers declared bankruptcy, while others reduced coverage and implemented significant rate hikes. Consequently, Florida currently holds the record for the highest homeowner’s insurance premiums in the country.
To support insurers in Florida, the state used taxpayer funds to offer backup financial assistance. In response to the aftermath of Hurricane Ian, DeSantis and state legislators enacted new restrictions on lawsuits against insurers in late 2022. Many Democrats opposed these changes, and even former President Donald Trump labeled them as a bailout for insurance companies. Nevertheless, state officials assert that these reforms contributed to several companies either slightly lowering their rates or maintaining them this year.
However, with the arrival of the storms, multiple forecasts from rating agencies and investment analysts, including one from Moody’s released on Thursday, suggest that the losses may compel global reinsurance companies—responsible for offering additional financing in the event of major losses—to raise their rates in 2025. Insurers, particularly those strictly operating within Florida who cannot diversify their risk, depend on private reinsurers and the state-established Florida Hurricane Catastrophe Fund for supplementary financing. Such increased costs are likely to be passed down to consumers.
“They are going to use any opportunity of a ‘what if factor’ to justify being manipulative over the process,” stated Chief Financial Officer Jimmy Patronis, a Republican who plays a role in overseeing the insurance industry.
Patronis acknowledged that he understands Floridians are “frustrated,” but he remains optimistic about the changes implemented by the state in recent years, asserting that several new companies have entered the market over the past year. “We would not be getting nine more companies if we were not doing something right,” he affirmed.
Recent polls indicate that insurance remains a key issue for Florida voters, and it has become a major point of criticism from Democrats targeting Republicans in the state. Some political analysts predict that it could become a central issue in the 2026 elections when voters choose a new governor.
A significant unresolved issue stemming from Hurricane Milton is its potential impact on the state-created insurer of last resort, Citizens Property Insurance, and the Florida Hurricane Catastrophe Fund (often referred to as the “Cat Fund”). Established over the past three decades to strengthen Florida’s insurance market, both entities may face pressure in the wake of the storm.
In an analysis released on Thursday, S&P Global Ratings credit analysts noted that “Florida also has long-standing mechanisms in place to help stabilize the property insurance market in light of its inherent exposure to natural disasters.” However, they cautioned that “the frequency of higher-cost events could strain individuals’ insurance premiums, resulting in increasing unaffordability over time.”
Citizens, which holds numerous policies in the Gulf Coast region where the storm impacted, faces significant exposure. If Citizens depletes its reserves and needs to borrow funds, it would impose a surcharge—often labeled a “hurricane tax” by critics—on most insurance policies across the state, including those for vehicles.
A spokesperson for Citizens reported on Friday that around 12,000 claims have been filed so far.
Florida mandates that all property insurers acquire backup reinsurance from the “Cat Fund,” which was established following Hurricane Andrew, the devastating storm that hit South Florida in 1992. Insurers can seek reimbursements once they reach a specific payout threshold. The “Cat Fund” has already disbursed approximately $4.75 billion for losses related to Hurricane Ian two years ago.
Currently, the “Cat Fund” has around $6 billion available and was projected to exceed $10 billion by year-end. Similar to Citizens, it is also authorized to levy a surcharge if it must borrow money.
Emily Percival, director of external affairs for the State Board of Administration, which oversees the “Cat Fund,” stated they are requesting damage estimates, while cautioning that current figures “are not reliable indicators.” Percival emphasized that the fund is “well positioned with projected liquid resources.”
Zack Colman contributed to this report.
Emily Johnson contributed to this report for TROIB News
The storm veered south of the vulnerable Tampa Bay area but unleashed deadly tornadoes and powerful winds across much of the state. As of Saturday, over 1.5 million residents were without power, and the storm has been linked to at least 17 fatalities. Authorities are concerned that the heavy rainfall associated with the storm could lead to flooding in several rivers in the upcoming days.
While it is expected that many private insurers will be able to manage the losses incurred by Milton, the successive impacts of Hurricanes Helene and Milton could produce damages significant enough to undermine the progress towards stabilizing the insurance market that Gov. Ron DeSantis and other top Republicans have frequently touted.
Mark Friedlander from the Insurance Information Institute indicated that insurers are currently awaiting loss estimates, which are anticipated to be substantial. “We anticipate Hurricane Milton will be a double-digit billion-dollar loss event and the largest insured loss for any U.S. natural catastrophe in 2024,” Friedlander noted. “However, we don’t expect Milton will reach the level of Hurricane Ian in 2022, which we estimated as a $50 billion to $60 billion insured loss. Ian is the second-largest U.S. natural catastrophe loss on record behind Hurricane Katrina.”
Reports from insurers are just beginning to emerge in the wake of Milton, with Florida insurance regulators noting that more than $586 million in losses have already been reported from nearly 44,000 claims.
Florida's insurance market was on the brink of collapse a few years ago due to a combination of factors, including a series of storms and what insurers described as excessive lawsuits against them. Several insurers declared bankruptcy, while others reduced coverage and implemented significant rate hikes. Consequently, Florida currently holds the record for the highest homeowner’s insurance premiums in the country.
To support insurers in Florida, the state used taxpayer funds to offer backup financial assistance. In response to the aftermath of Hurricane Ian, DeSantis and state legislators enacted new restrictions on lawsuits against insurers in late 2022. Many Democrats opposed these changes, and even former President Donald Trump labeled them as a bailout for insurance companies. Nevertheless, state officials assert that these reforms contributed to several companies either slightly lowering their rates or maintaining them this year.
However, with the arrival of the storms, multiple forecasts from rating agencies and investment analysts, including one from Moody’s released on Thursday, suggest that the losses may compel global reinsurance companies—responsible for offering additional financing in the event of major losses—to raise their rates in 2025. Insurers, particularly those strictly operating within Florida who cannot diversify their risk, depend on private reinsurers and the state-established Florida Hurricane Catastrophe Fund for supplementary financing. Such increased costs are likely to be passed down to consumers.
“They are going to use any opportunity of a ‘what if factor’ to justify being manipulative over the process,” stated Chief Financial Officer Jimmy Patronis, a Republican who plays a role in overseeing the insurance industry.
Patronis acknowledged that he understands Floridians are “frustrated,” but he remains optimistic about the changes implemented by the state in recent years, asserting that several new companies have entered the market over the past year. “We would not be getting nine more companies if we were not doing something right,” he affirmed.
Recent polls indicate that insurance remains a key issue for Florida voters, and it has become a major point of criticism from Democrats targeting Republicans in the state. Some political analysts predict that it could become a central issue in the 2026 elections when voters choose a new governor.
A significant unresolved issue stemming from Hurricane Milton is its potential impact on the state-created insurer of last resort, Citizens Property Insurance, and the Florida Hurricane Catastrophe Fund (often referred to as the “Cat Fund”). Established over the past three decades to strengthen Florida’s insurance market, both entities may face pressure in the wake of the storm.
In an analysis released on Thursday, S&P Global Ratings credit analysts noted that “Florida also has long-standing mechanisms in place to help stabilize the property insurance market in light of its inherent exposure to natural disasters.” However, they cautioned that “the frequency of higher-cost events could strain individuals’ insurance premiums, resulting in increasing unaffordability over time.”
Citizens, which holds numerous policies in the Gulf Coast region where the storm impacted, faces significant exposure. If Citizens depletes its reserves and needs to borrow funds, it would impose a surcharge—often labeled a “hurricane tax” by critics—on most insurance policies across the state, including those for vehicles.
A spokesperson for Citizens reported on Friday that around 12,000 claims have been filed so far.
Florida mandates that all property insurers acquire backup reinsurance from the “Cat Fund,” which was established following Hurricane Andrew, the devastating storm that hit South Florida in 1992. Insurers can seek reimbursements once they reach a specific payout threshold. The “Cat Fund” has already disbursed approximately $4.75 billion for losses related to Hurricane Ian two years ago.
Currently, the “Cat Fund” has around $6 billion available and was projected to exceed $10 billion by year-end. Similar to Citizens, it is also authorized to levy a surcharge if it must borrow money.
Emily Percival, director of external affairs for the State Board of Administration, which oversees the “Cat Fund,” stated they are requesting damage estimates, while cautioning that current figures “are not reliable indicators.” Percival emphasized that the fund is “well positioned with projected liquid resources.”
Zack Colman contributed to this report.
Emily Johnson contributed to this report for TROIB News
