Analysis of Hurricanes Helene and Milton Provide Insights on Public and Private Flood Market

Flooding is a peril that took center stage this year amid an active Atlantic Hurricane season, a fact that’s highlighted in a new report.

The National Insurance Flood Program is expected to face total losses between $8.2 billion and $10.5 billion for 2024, while the private flood insurance market in Florida is projected to see total losses of more $500 million from hurricanes Helene and Milton, the report shows.

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Neptune Flood, a provider of private flood insurance, released an analysis of the aftermath of Helene and Milton, highlighting the challenges and systemic issues in the U.S. flood insurance market.

The report outlines the damages from hurricanes Helene and Milton, with Helene resulting in more than 55,000 NFIP claims and projected losses between $6 billion and $7 billion, while Milton has resulted in more than 18,000 claims with projected losses of $1.5 billion to $2.5 billion.

Related: Analysis Shows Wider Florida Flooding From Milton: 185,000 Buildings Hit

Helene surpassed the 48,732 NFIP claims from Hurricane Ian, considered the fourth largest storm in NFIP history, according to the report.

“The NFIP’s average payout per Ian claim was $106k and from Harvey was $117k, suggesting that total losses from Helene could range between $6 billion to $7 billion before accounting for loss adjustment expenses,” the report states. “With such a loss, Helene will eclipse Ian’s $4.9 billion loss and become a larger financial hit for the NFIP.”

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Other findings in the report include:

• The NFIP is expected to face total losses between $8.2-10.5 billion for 2024, leading to a loss ratio above 200% before accounting for loss adjustment expense.
• Private Market Losses: The private flood insurance market in Florida has also experienced considerable losses, with projections indicating total losses of over $500 million from Hurricanes Helene and Milton.
• Shift Towards Private Insurance: The limitations of the NFIP have driven policyholders to seek more comprehensive private insurance options, which offer higher coverage limits and more flexibility.
• Pinellas County, Florida, has seen more than 22,000 NFIP claims from Helene alone, with an additional 2,000 NFIP claims from Milton. The county saw over 40,000 buildings damaged in the storms, highlighting both the significant flood damage and extensive uninsured risk in the area.
• Since the implementation of Risk Rating 2.0, the NFIP has seen a decline in its insured base, with many homeowners opting for private flood insurance due to rising premiums and coverage limitations.
• The reliance on outdated flood maps remains a significant challenge, with many homeowners unaware of their true flood risk.
• Addressing the challenges of the flood insurance market requires collaboration among various stakeholders, increasing public awareness, and ensuring adequate insurance coverage.