State and insurance industry officials agree that the quartet of storms that slammed into Florida will likely surpass Hurricane Andrew, the costliest natural disaster in U.S. history.
Officials say the combined damage could exceed $20 billion in insured losses, and there’s already a debate about whether the storms will lead to higher rates.
Industry economist Bob Hartwig says the high losses will put pressure on rates. While the industry was overhauled after Andrew, he says no one ever predicted four hurricanes in one state.
But Tom Gallagher, Florida’s top insurance regulator disagrees. Gallagher said companies will have to prove that their computer models of storm risk justify higher rates. He expects one or two companies to go under as a result of the hurricanes – but he says the industry is far more secure now than it was when Andrew struck in 1992.
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