UPDATE: Hurricane Ian Turning Toward Tampa Area and $258B in Replacement Value

By | September 27, 2022

Florida property insurance experts have long warned that a powerful hurricane strike on a major metropolitan area could result in catastrophic losses and the insolvency of more carriers. Those warnings could become reality by the end of the week if, as is now predicted, Hurricane Ian comes ashore as a Category 4 storm in the Tampa area, the first direct hit on the metropolis in more than a century.

A direct bearing on the Tampa Bay area, which includes the populated and property-rich cities of St. Petersburg, Clearwater, and Sarasota, could damage an estimated 630,376 residential properties — with a reconstruction cost value of $149 billion, according to a report released Monday by CoreLogic, a property analytics firm. For the larger coastal area on Florida’s western flank, including Naples and Punta Gorda, more than 1 million homes could see serious damage, resulting in some $258 billion in replacement costs.

“Hurricane Ian has all the ingredients you need for a bad storm surge event,” Tom Jeffery, senior hazard scientist at CoreLogic, said in a statement. “Due to Hurricane Ian’s slower speed and rapid intensification in the eastern Gulf of Mexico, the threat of a widening wind field bringing damaging storm surge increases each day. Many homes along Florida’s western coast are at risk of storm surge inundation regardless of where the storm makes landfall, and even more homeowners will contend with heavy rainfall and hurricane-force winds throughout midweek.”

Citizens Property Insurance Corp., the largest property insurer in the state, may be particularly vulnerable to the forces of wind and water. In five counties in the Tampa area – Citrus, Hernando, Hillsborough, Pasco and Pinellas – Citizens has more than 175,000 policies and a total exposure of more than $54 billion, the Florida Office of Insurance Regulation’s quarterly report shows.

That’s more than 20% of Citizens’ total insured value in the state.

In Hernando County, north of Tampa and home to the popular Weeki Wachee Springs State Park, Citizens has 22,628 policies and some $8.2 billion in exposure, a spokesman for Citizens said Monday.

Citizens on Monday also issued a bulletin to agents noting that policy binding has been suspended while the storm is approaching. The corporation’s rule states that “agents may not bind applications for new coverage or policy changes for increased coverage, regardless of effective date, when a tropical storm or hurricane watch or warning has been issued by the National Weather Service for any part of the state of Florida.” Agents will be notified via email when the suspension is lifted.

A report from Acrisure, a global insurance broker and services firm, said that even if wind damage is lessened, storm surge of as much as 10 feet could swamp parts of Tampa Bay.

The slower forward motion of Hurricane Ian “would likely prolong the storm surge, wind, and rainfall impacts along the affected portions of the west coast of Florida,” the report noted.

Tampa Electric Co. said it may have to shut down power in part of downtown Tampa early Wednesday to “avoid serious damage to the underground equipment from saltwater storm surge, which will significantly shorten restoration time after the storm,” news outlets reported.

Parts of the Tampa Bay area began evacuating Monday and Tuesday as officials warned of a landfall late Wednesday or Thursday. Mandatory evacuation orders have been issued for parts of Pinellas and Hillsborough counties and emergency shelters were opened, according to news reports. Hillsborough County suspended classes through Thursday to prepare schools to serve as shelters for evacuees. Additional watches for more northern areas along the peninsula’s west coast may be issued, the Associated Press reported.

Tampa Bay International Airport was set to suspend operations at 5 p.m. Tuesday, Gov. Ron DeSantis said, CNN reported. The Port of Tampa Bay is also planning to suspend operations Tuesday morning, the governor said.

DeSantis has declared a state of emergency throughout Florida and urged residents to prepare for the storm to lash large swaths of the state with heavy rains, high winds and rising seas.

“We’re going to keep monitoring the track of this storm. But it really is important to stress the degree of uncertainty that still exists,” DeSantis said at a news conference Sunday, cautioning that “even if you’re not necessarily right in the eye of the path of the storm, there’s going to be pretty broad impacts throughout the state.”

Flash and urban flooding is possible in the Florida Keys and Florida peninsula through midweek, and then heavy rainfall was possible for north Florida, the Florida panhandle and the southeast United States later this week.

The agency has advised Floridians to have hurricane plans in place and monitor updates of the storm’s evolving path.

President Joe Biden also declared an emergency, authorizing the Department of Homeland Security and the Federal Emergency Management Agency, or FEMA, to coordinate disaster relief and provide assistance to protect lives and property. The president postponed a scheduled Sept. 27 trip to Florida because of the storm.

The emergency declaration triggered a bulletin from the state Office of Insurance Regulation on Monday, reminding health insurers and workers’ compensation insurers to allow early refills of prescription medicines.

Insurers licensed by OIR “shall waive time restrictions on prescription medication refills, which include suspension of electronic ‘refill too soon’ edits to pharmacies,” the office said.

The impending storm also forced the postponement of a Florida Division of Workers’ Compensation workshop on physician dispensing rules that was set for Thursday in Tallahassee.

Even if the hurricane is not as powerful as some major storms in years past, rising material costs could mean huge costs for insurers.

Graphic: Probability wind map for Hurricane Ian. The purple indicates 90% or greater chance of tropical-storm-force winds (39 mph or greater). Source: National Weather Service, as of early Monday morning, Sept. 26.

Topics Catastrophe Natural Disasters Hurricane Hurricane Ian

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