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Florida closes the books on rough hurricane season

Floridians can finally exhale — hurricane season is over. Though claims and damage estimates are still being tallied, this hurricane season turned into one of the most expensive nationally — and one that may eventually affect some insurance rates.

"The big lesson from this season was that we had three (Category 4s) in one season and that's really unusual," Lynne McChristian, spokesperson for the Insurance Information Institute, said.

A Bloomberg report estimated the total damage caused during the season at $202.6 billion. That's just behind the 2005 season, which saw $211.2 billion in damage, according to the National Weather Service. Hurricane Maria, which devastated Puerto Rico, is expected to account for the bulk of this year's damage.

Locally, according to the Florida Office of Insurance Regulation, the state saw $5.9 billion in insured losses as of Nov. 13, almost entirely due to Hurricane Irma. Just two years ago, the agency reported $1.18 billion in insured losses from Hurricane Matthew.

Even before hurricane season, 2017 was shaping up to be expensive for the country. In the first half of 2017, McChristian said, there was a 21 percent jump in catastrophe payouts, due largely to wind and flood damage, as well as significant impact from California wildfires.

"It's been a big year from coast to coast," McChristian said.

Preparation was Florida's strength this season. Hurricane Irma ripped through the center of the state in September, bringing significant damage to the Keys and areas such as Naples. But the overall damage totals were significantly lower than projected.

"Insurance companies did not have huge payouts because the storm was not as damaging as they thought," McChristian said.

Shrugging off some concerns that some small insurers were both untested and not adequately capitalized, however, the companies were relatively well-prepared for the worst. Much of that financial preparation came in the form of sufficient reinsurance.

Reinsurance is secondary coverage that insurance companies buy to ensure that they can pay out any claims their customers file for catastrophic losses. Its cost is determined on a national scale, as opposed to statewide for other insurance rates.

In Florida, all insurance companies are required to buy a portion of that from the Florida Hurricane Catastrophe Fund. The so-called "Cat Fund" was fully funded going into the season, able to pay out up to $17 billion. Roughly $14.9 billion of that was in cash, while another $1 billion was reinsurance that would activate if losses exceeded $11.5 billion. The fund also had $2.7 billion in pre-event bonds.

Related coverage: State Catastrophe Fund ready to pay up to $17B in claims as Irma looms>

While it's still to early to gauge exactly how much the Cat Fund will pay out, conservative estimates peg payouts at about $5 billion, leaving it with plenty of cash still available.

"We're still looking at almost full coverage for next year," John Kuczwanski, spokesperson for the fund, said.

Next month will provide a clearer picture as insurance companies report more of their claim numbers.

Citizens Property Insurance Co., the state-run property insurer of last resort, expects to see 70,000 claims related to Hurricane Irma, accounting for about $1.2 billion in damages.

"With $6.4 billion in surplus and substantial reinsurance coverage, Citizens remains fiscally sound after responding quickly and effectively to Hurricane Irma," Chris Gardner, chairman of Citizens' board of governors, said in a release.

Not reflected in damage estimates are the significant personal costs many incurred in the largest mass evacuation in the state's history.

"We've never had a storm that was this widespread where every county was on alert," the insurance institute's McChristian said.

Consumers aren't likely to feel any extra pinch from this hurricane season any time soon in terms of hiked rates. Insurance companies, which are required to file their rates with state regulators, have already filed for 2018, locking in next year's prices.

A slight bump could eventually come from hiked reinsurance rates, but those wouldn't show up on customers' bills until 2019.

Breathe a sigh of relief for the season's close, McChristian said, but don't get too cozy.

"We've only got seven more months before it starts all over again," she said."

Contact Malena Carollo at or (727) 892-2249. Follow @malenacarollo on Twitter.