Experts have stated that Hurricane Michael is one of the strongest hurricanes to ever hit Florida. As a result, the damages and losses might reach anywhere between the $2 billion and $10 billion. According to the New York Times, the number of lives lost so far reaches 13, but this number might increase. Besides, hundreds of people have been rescued in the last couple of days thanks to the efforts of search and rescue teams.
Even when Hurricane Michael has weakened and became a Post-Tropical Cyclone, the amount of property damage and victims is quite significant. The situation is critical, especially for Florida’s insurance market and its unique model. To make sure we are prepared for the aftermath, we’ll discuss what differentiates this market from that of other states. Understanding the nature of the damages Hurricane Michael has caused and knowing what to do after Michael will help us make the most out of our disaster insurance coverage.
Florida’s Unique Insurance Market
Between 1992 and 2005, Florida’s insurance market saw a significant decrease in the presence of brand-name insurance companies like State Farm and Allstate Corp. This was because of the high-risk of home insurance in the area, being quite prone to hurricanes and natural disasters. What resulted from that market shift was the entrance of around 50 small to medium-sized insurance companies. Such companies do not have the capital required to cover all the insurance claims. Consequently, they purchase reinsurance plans with bigger companies. This way, multiple insurance companies will share the coverage of a single policyholder.
The Damages of Hurricane Michael
According to specialists at Karen Clark & Co., the damages of Hurricane Michael might reach $8 billion in insurance and reinsurance costs. Some of the most affected areas in Florida are Mexico Beach and Panama City. Authorities say that the area is still unsafe to return. They also mentioned that it will take a long time before residents can come back to their homes and start the healing and recovering process. In these areas, houses are completely underwater, roofs have been blown apart, several boats sank, and trees fell on homes and cars altogether.
Insurance Tips for Victims of Hurricane Michael
The damages that Hurricane Michael has caused will take a long time to repair. Whether we are home or business owners, there are some tips we can keep in mind until the time to file our claims arrives. The first thing we should do is contact our insurance company. Remember to ask about the kind of damages coverage of your policy. Understanding the difference between wind damage and water damage is essential. Then, we should figure out whether wind or water damaged and/or destroyed our property and personal items.
Making a list or inventory of all our valuables is always a good idea. This will make the whole insurance claim process easier, meaning we will recover sooner. Documenting all the property damage that we suffered is quite important, too. This way, our claim record will be clear, complete, and straightforward, and our recovery process will be easier and faster.