Hurricane Idalia: Damage Estimates, Unique Storms, and Lessons Learned

The state of Florida will experience hurricanes. That is a reality that residents, government, businesses, and the insurance industry understands. Understanding the threat, though, does not diminish the impact of hurricanes once they strike, and no matter how prepared a state may be, certain hurricanes can still offer up unwelcome surprises.

When Hurricane Idalia made landfall Aug. 30 in Florida’s Big Bend, discussions and articles noted the rarity of a major hurricane hitting this area, and concerns mounted about the potential impacts. Now that the storm has come and gone, and damage assessments have begun, CLM Magazine talks to Mark Friedlander, director, corporate communications for the Insurance Information Institute, to discuss Hurricane Idalia’s impact and what lessons can be learned.

Q: When we look at the insured-loss estimates and the damage done, what is your overall impression of Hurricane Idalia’s impact on Florida?  Some have suggested Florida “dodged a bullet” based on the areas most impacted—and the areas that were spared.  Would you agree with that assessment?

Mark Friedlander: “In terms of losses incurred from Hurricane Idalia, it is a much smaller event for the property and casualty industry compared to Hurricane Ian last year. Catastrophe modelers estimate private insurer losses for Idalia will run $2-$5 billion, compared to the estimated $60 billion loss from Ian.

“The biggest differences are Idalia weakened to a Category 3 before landfall and struck one of the most sparsely populated areas of Florida. Idalia would have been a much bigger loss event if it struck a densely populated area like Tampa Bay. Another significant differentiator compared to Ian was coastal residents heeded evacuation orders in the most flood-prone areas, which prevented loss of life from drowning in storm surge.”

Q: What are your thoughts on the path Idalia took? Much has been made of Idalia being the first major hurricane to make landfall in Florida’s Big Bend since 1896, although a couple of others tracked close to that area. What do you believe is the significance of where Idalia struck?

Friedlander: “From the time the storm formed, models were very accurate on where Idalia would make landfall in Florida’s Big Bend region. In fact, Idalia followed a somewhat similar path to Hurricane Michael in 2018, which struck the Florida Panhandle as Category 5 major hurricane, but Idalia tracked further east.

“The unique aspect of Idalia is it initially formed near the Yucatan Peninsula, which is typically where we see tropical cyclones form later in the season, not in August. The bottom line is no area of Florida’s nearly 1,400 miles of coastline is safe from landfalling hurricanes, especially with record sea-surface temperatures fueling storms this season.”

Q: How would you characterize recovery efforts up to this moment?  What is going well, and what are some of the obstacles?

Friedlander: “Recovery efforts appear to be going well in the impacted communities. The Florida Department of Financial Services quickly established two insurance villages in hard-hit counties, where dozens of property insurers are on the ground helping their insureds file claims and issuing payments for additional living expenses. Under the direction of a new insurance commissioner, Florida’s Office of Insurance Regulation is stressing that insurers quickly respond to impacted policyholders and focus on processing and settling claims as quickly as possible.”

Q: After every storm, we always discuss “lessons learned.”  What are the lessons learned from Hurricane Idalia?

Friedlander: “The biggest lesson learned from Idalia is, once again, that too many Floridians are not insured for flood damage. In the hardest-hit counties, flood insurance take-up rates were 5% or less—much lower than the statewide average of 18%.

“Those without flood coverage will have to rely on grants from FEMA and the state of Florida to help in their recovery. However, these grants will not provide funding to rebuild homes, so it will be a very long recovery process. We constantly stress that consumers need adequate levels of property insurance and flood insurance to ensure they are financially protected from hurricane damage.”