Hurricane Milton’s 123,000 Claims Signal New Reinsurance Strain, Rate Hikes Expected

Hurricane Milton has generated more than 123,000 insurance claims and an estimated $1.5 billion in insured losses, surpassing the claims filed for Hurricane Helene, which hit Florida two weeks earlier. The Florida Office of Insurance Regulation reported that the losses, while less severe than anticipated, are expected to drive reinsurance price increases, leading to higher property insurance rates in the state. Jim Santo, CEO of Loggerhead Reciprocal Interinsurance Exchange, indicated that the rising costs from reinsurers will push property insurers to adjust their rates accordingly.

Experts predict that despite some improvements in Florida’s insurance industry, the claims from Milton, along with those from Hurricane Helene, will reverse the stabilization seen in mid-2024. Reinsurance firms are likely to adjust their risk models following these events, according to insurance attorney Fred Karlinsky. Florida’s insurance market, still recovering from the insolvency of 10 insurers in the past few years, is better equipped to handle these losses, thanks to recent legislative reforms that curbed excessive litigation.

By comparison, Milton’s damage, though significant, is less than Hurricane Ian in 2022, which caused $63 billion in insured losses. However, Milton and Helene together are estimated to cost between $35 billion and $55 billion, signaling more challenges for reinsurers and insurers alike.