Over 800K homes in danger from Hurricane Idalia: CoreLogic.
The destructive power of Hurricane Idalia looms over the Florida Gulf Coast, threatening over 800,000 homes.
According to CoreLogic, a property analytics data service, the cost of reconstruction could reach hundreds of billions of dollars. Their estimate, released on Aug. 29, is based on data from the National Hurricane Center, which projected that Idalia would make landfall as a Category 3 storm.
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As Idalia made landfall on Aug. 30, it brought winds of up to 150 miles per hour and storm surges as high as 11 feet. The impact was felt between Tallahassee and Tampa, and the storm is now affecting Georgia and the Carolinas.
Sunshine State Facing Multi-Billion Dollar Catastrophe
CoreLogic warns that 808,321 homes, both single-family and multifamily, could suffer damages with a reconstruction cost value (RCV) of up to $238.4 billion. RCV measures include expenses for materials, equipment, and labor, but not the value of the land or lot.
“Due to the sparsely populated forecasted impact area, there will likely be a lower insured loss ceiling from Idalia, compared to last year’s Hurricane Ian,” said Jon Schneyer, director of Catastrophe Response at CoreLogic. He also emphasized that hurricanes hitting the Gulf Coast tend to generate more substantial storm surges than those hitting the Atlantic Coast.
Analysts predict that Hurricane Idalia may cause even more financial stress for homeowners than Hurricane Ian did in 2022, potentially leading to insolvencies and foreclosures. This comes at a time when Florida’s housing market, once relatively affordable, has become increasingly out of reach for many due to the pandemic.
Insurance Companies Are Dropping Coverage in Florida
Florida’s housing market is facing significant challenges with homeowner insurers, as some companies are partially pulling coverage for certain homeowners in the state.
Farmers Insurance, for example, is discontinuing automobile, home, and umbrella policies for Florida residents. AAA is also sunsetting policies for a “very small” percentage of high-risk policies, as reported by National Mortgage News in July.
Insurers attribute their withdrawal from the Sunshine State to exposure to storm damage and increased construction costs, along with inflation. The Florida insurance market has been losing liquidity and competition, leaving homeowners with limited choices.
“Insurance companies over time have been leaving the Florida insurance market. This has created a lack of liquidity and a loss of choices and competition. The devastating hurricane last year in Fort Myers was more salt in the wound. The numbers don’t lie,” said Phil Nicozisis, a real estate developer and property owner.
Florida has the highest average property premiums in the nation, which have been further exacerbated by rampant litigation issues, including fraudulent insurance scams and favorable attorney fees. This has resulted in a wave of lawsuits against insurers, with over 250,000 filed in March alone. Seven insurance companies have gone insolvent in the past year.
Lenders predict that these challenges will deepen unaffordability for residents and buyers in Florida, where home prices are skyrocketing and insurance rates are among the highest in the country.
Homeowners Insurance Becomes a Growing Concern
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