Hurricane Milton is expected to cause over $100 billion in insurance claims, creating even more challenges for Florida homeowners in obtaining insurance. On top of that, the cost to the public and government is projected to exceed an additional $50 billion, adding to the financial strain on taxpayers and the state. Much of the damage from Milton came from the powerful winds and the unprecedented number of tornadoes it spawned. The eastern side of Florida saw the most severe impacts, with over 30 tornadoes causing extensive damage and the highest number of fatalities and potential financial losses.
Citizens Property Insurance Corporation, Florida’s state-backed insurer, has become the largest insurance provider in the state due to the exodus of private insurance companies. Many companies are pulling out due to increasing risks from hurricanes and other extreme weather events driven by climate change. Citizens, however, faces significant financial strain. As hurricane damage grows more frequent and severe, Florida taxpayers are likely to face an unsustainable burden in covering reconstruction costs. The situation highlights the ongoing vulnerability of Florida’s real estate market, and if you haven’t already sold property in the state, it might be a case of better late than never.
The growing frequency and intensity of storms, combined with the financial instability of the insurance industry in Florida, make future investments in the region highly risky. As climate change continues to escalate, the risks are only expected to worsen.
It’s important to note that the degree of risk varies by region and property type. Some areas may experience more immediate and severe impacts, while others may be more resilient. Assessing and mitigating these risks require a comprehensive understanding of local climate vulnerabilities and the implementation of strategies to enhance property resilience. Policymakers, real estate professionals, and property owners are increasingly recognizing the importance of addressing climate risks to ensure the long-term sustainability and value of real estate assets. Thus, our recommendation to evacuate Florida now (i.e. Managed Retreat).
* Our climate model employs chaos theory to comprehensively consider human impacts and projects a potential global average temperature increase of 9℃ above pre-industrial levels.
Hurricane Milton / October 9, 2024