Hurricane Ian could devastate an insurance market already on life support

Jacksonville, Fla. — Yet another Florida insurance company, FedNet, is going belly up Monday as Hurricane Ian sets its sights on Florida’s west coast.

Florida’s insurance market is on life support as it stands. If Ian hits heavily-populated Tampa Bay as expected, industry experts fear it could drive more insurers into bankruptcy and lead to double digit rate hikes for every policy holder in the state.

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Duval homeowner Agron Meci has property insurance now, but he’s in the market for a new carrier.

His current policy is set to expire next month because his insurance company is facing bankruptcy.

He’s now looking at his annual bill doubling.

“The last one I had was around $1,200 and the one I got the other day was $2,500,” said Meci.

Six Florida insurance companies have gone belly up this year alone, leaving policyholders like Meci between a rock and a hard place.

Read: Hurricane Ian: Northeast Florida school closure information

Many have gone to Florida’s state-backed insurer of last resort, Citizens, which now has over one million policies – nearly twice as many as it had this time last year.

State Senator Jeff Brandes (R-St. Petersburg) has worked on Florida’s property insurance problems for years.

He described the threat posed by Hurricane Ian as ‘the sum of all his fears’.

“You’re talking about a 40 to $50 billion event, which is gonna potentially devastate some of the insurers we have currently in the market,” said Brandes.

Brandes anticipates policy holders in the private market can expect to see rate hikes of up to 40% next year as a result of Ian.

He also noted Citizens holds about a quarter of the policies in Tampa Bay and estimated the company could see claims nearing $10 billion from Ian.

If Citizens can’t pay those claims or drains its reserves, every Floridian with a home or auto policy would be on the hook to pick up the tab through assessments – essentially a hurricane tax levied on policy holders.

“Every policy holder in the state of Florida, home and auto, should be watching this storm very carefully because it could have a direct impact on their pocketbooks,” said Brandes.

Read: How to keep your puppies safe during the hurricane

For policyholders like Meci, there’s little they can do but eat the cost.

“It might be a little bit higher, but I have to have it,” said Meci.

We spoke with Citizens spokesperson Michael Peltier.

Peltier couldn’t say whether Ian will result in a hurricane tax, but he said a direct hit to Tampa Bay would be very different than if the storm makes landfall further north in the Panhandle.

“That’s the $64 million question,” said Peltier.

For those currently without an insurance policy, it’s too late to purchase one.

Insurance companies don’t write policies when a named storm’s landfall is imminent.

Even if you could get a policy, it wouldn’t kick in for at least 30 days.

Whether you have coverage or not, make sure you photograph or video your property and valuable belongings before the storm hits.

Read: Portable Generators and Hurricane Ian

If you have renters’ insurance, those policies generally cover all the belongings within your home and there typically is not deductible on claims.

Michael Barry with the Insurance Information Institute said if you don’t have insurance that doesn’t necessarily mean you can’t get help if your home sustains damage.

FEMA assistance can become available if the President issues a disaster declaration in your county.

“Again, it’s not as generous as a homeowners insurance policy or flood insurance policy is gonna be, but FEMA individual disaster assistance will probably be your best recourse if found yourself to be uninsured,” said Barry.

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