Damage from Hurricanes Helene, Milton Could Exceed $200B

As Florida’s Tampa Bay region braces for Hurricane Milton to make landfall on Wednesday, many in the storm’s path are still reeling from Hurricane Helene’s destruction. Both hurricanes could result in damage topping $200 billion, estimates show.

The storms are expected to affect insurance premiums, along with commercial and residential property owners across the state. For years, insurers’ property claims in the aftermath of hurricanes have led underwriters to either raise premiums or exit the Sunshine State altogether.

Hurricane Helene made landfall near Perry in the state’s Big Bend area on Sept. 26 as a Category 4 storm, one of the most powerful to hit the U.S. Helene caused more destruction as it made its way through Georgia, the Carolinas, Virginia and Tennessee, wiping out entire towns and cutting off electricity to millions of people.

The storm caused between $30.5 billion and $47.5 billion in wind and flood damage, according to estimates from CoreLogic. Record storm surge flooding resulted in property damage up the entire Gulf Coast. Towns in North Carolina were destroyed.

Only a portion of those properties were insured. The total insured wind and flood losses are estimated at between $10.5 billion and $17.5 billion, according to CoreLogic.

More bad news could be in store for those insured. Insurance companies have tightened coverage after losses from natural disasters, adding exclusions and other provisions to limit damage to their bottom lines. Flood insurance is purchased separately, and fewer than one in 100 homeowners in the worst-flooded counties inland have flood coverage, Mark Friedlander of the Insurance Information Institute told the Wall Street Journal.

Complicating matters is that residential development on flood-prone areas in Florida has boomed over the past two decades. From 2001 to 2019, half of the development on floodplains across the U.S. was in the Sunshine State. Construction in these low-lying areas translates to more flood damage. A number of South Florida developers such as the Related Group have expanded to Tampa and other parts of the state’s west coast.

Crews have been working nonstop to clean up debris from Helene ahead of Hurricane Milton.

Two weeks after Helene made landfall, Milton is expected to hit Florida’s west coast late Wednesday after barreling toward the state as one of the strongest hurricanes on record. Milton, which was a Category 5 storm as of 5 p.m. Tuesday with winds of 165 miles per hour, has put nearly the entire state on notice.

Fifty-one counties are under a state of emergency, and all of South Florida is under a tropical storm warning as of Tuesday. The region is expected to experience heavy rainfall, flooding, and sustained tropical storm force winds from the hurricane’s outer bands, starting as early as Tuesday night.

Hurricane Milton is expected to weaken to a Category 3 storm with winds of 125 miles per hour at landfall, according to the National Hurricane Center.

Still, a hurricane of Milton’s magnitude in one of Florida’s most heavily populated areas “could result in mid-double-digit billion dollar loss,” according to the investment bank and financial services firm Jefferies. That type of natural disaster could result in $175 billion in losses in Tampa, and $70 billion in losses in the Fort Myers region, depending on where the storm hits.

More than half a million homes are at risk of storm surge flooding in the Tampa Bay and Sarasota metro areas, assuming Milton makes landfall as a Category 3 storm. Those homes have a combined reconstruction cost of $123 billion, according to CoreLogic.

Tampa Mayor Jane Castor, who said she has never seen a hurricane like Milton, urged residents in evacuation areas to leave. The storm surge could reach 10 to 15 feet.

“There’s never been one like this. Helene was a wakeup call. This is literally catastrophic,” Castor told CNN. “I can say without any dramatization whatsoever, if you choose to stay in one of those evacuation areas, you’re going to die.”