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It has been just over a month since Hurricane Michael slammed the Florida Panhandle as a Category 4 hurricane with wind speeds reaching just shy of Category 5 status.

The devastation from the storm that killed at least 35 people in Florida is still impacting residents and insured losses continue to climb as recovery efforts are in full effect and will be for some time.

“Michael saw our worst fears realized, of rapid intensification just before landfall on a part of a coastline that has never experienced a Category 4 hurricane,” University of Miami hurricane researcher Brian McNoldy said after the storm hit, as reported by The Associated Press.

The massive storm made landfall in Mexico Beach, Fla., on Oct. 10 with maximum sustained winds of 155 mph, according to catastrophe modeling firm AIR Worldwide. The minimum central pressure at landfall — a key measure of hurricane strength — was 919 mb, the third lowest on record for a U.S. hurricane, AIR said.

Michael is the most powerful hurricane to have come ashore in the Florida Panhandle since the first records were kept in 1851, said Dr. Peter Sousounis, vice president and director of meteorology, AIR Worldwide.

“Fueled by unseasonably high 84-degree sea surface temperatures in the Gulf of Mexico and unhindered by any prior landfall, Hurricane Michael rapidly intensified shortly before making landfall at close to Category 5 intensity,” Sousounis said.

Mexico Beach was “virtually obliterated” AIR said, as it was in the right eyewall of Michael where storm surge is typically the highest. In addition, the high wind speeds leveled buildings in the area, as well as took down power lines and countless trees.

Wills Re’s Hurricane Damage Survey report noted catastrophic wind damage impacted residential properties in Panama City, Lynn Haven and Mexico Beach, Fla. Catastrophic storm surge damaged buildings along the coast of Mexico Beach and tree-fall caused “significant” damage to properties.

Florida Panhandle building codes do not require buildings in the area to sustain such high wind speeds, Willis Re noted, compared to similar buildings located in other hurricane-prone areas of Florida such as Miami or the Florida Keys, hence the majority of homes in the area were not designed to resist the storm’s impact.

“It should not be a surprise that many buildings failed to resist Michael’s brutal hurricane force wind,” the Willis Re report said.

Losses

Insured losses were just shy of $3 billion as of Nov. 9, according to the Florida Office of Insurance Regulation, with about 45.9 percent of claims closed so far. OIR reported that the number of claims had reached 119,160 across the sectors of residential property, commercial property, private flood, business interruption and other lines of business.

Florida Insurance Commissioner David Altmaier said Hurricane Michael was a very different storm compared to Hurricane Irma that impacted most of the state last year. Irma’s wind field and flooding impacts were felt over the majority of the state and in multiple major cities, resulting in nearly 1 million claims and $10.4 billion in losses with 28 counties topping 5,000 claims.

Michael targeted a specific region of the state but is noted to be the strongest storm to make landfall in Florida since Hurricane Andrew, OIR said. So far, five counties have topped 5,000 claims but Bay County accounts for roughly 71,000 of the 119,000 claims that have been filed.

Hurricane Michael’s Destruction in Photos

“Hurricanes Irma and Michael were two very different storms in terms of landfall and projected path, but both carried a significant impact,” Altmaier said.

Catastrophe modeling firms have estimated the total cost of Hurricane Michael claims will range from $4.5 billion to $10 billion. Those numbers include losses in Florida, as well as several other states that were impacted by the storm.

OIR also noted insurance companies’ preparation efforts are paying off from a solvency standpoint as there has not been any indication that companies will have an issue responding to claims.

Barry Gilway, CEO of Citizens Property Insurance Corp., said Hurricane Irma’s total impact on Citizens’ insurance surplus statewide was about 2 percent. The losses from Michael shouldn’t reach Citizens’ first reinsurance layer, meaning they believe that they should be able to pay Hurricane Michael claims with their existing policyholder surplus.

Insurance industry experts and rating agencies have also noted that while Michael’s losses will be significant to the industry, they won’t be enough to cause any major market changes.

Florida Commissioner of Agriculture Adam Putnam said Nov. 9 that damages to the state’s agriculture industries would be nearly $1.5 billion, with the timber industry bearing the brunt of the devastation at $1.3 billion in economic losses.

Recovery

The amount of devastation to the Florida Panhandle means the rebuilding efforts will go on for some time. Power was just fully restored to the Panhandle as of Nov. 6, AP reported.

The insurance industry will play an integral part in the recovery process and got to work as soon as Michael left the area.

Insurance villages were held in several of the communities affected by Hurricane Michael, including the state capitol of Tallahassee, Marianna and Panama City with up to 44 insurance companies and FEMA participating at various points to assist residents, according to a statement from Florida CFO Jimmy Patronis.

Insurance Commissioner Altmaier said the insurance industry’s response to the storm has been strong so far, with robust participation in the insurance villages and overall efforts to mobilize resources to impacted communities executed swiftly.

“Michael’s historic landfall as a Category 4 storm disrupted the lives of many Floridians, especially those on the Panhandle. It has been remarkable to see our state, industry and communities unify throughout the recovery of this catastrophic event,” Altmaier said.

Agents in the area said they were very pleased with the insurance industry’s response in the immediate aftermath of the storm, with a lot of carriers and their top executives physically on the ground at the claims villages. But there are still some areas that the industry can improve on.

“There have been instances where there is a lack of communication [and] adjusters with incomplete and wrong information in some cases,” Trey Hutt, president of Hutt Insurance Agency, which has locations in Panama City and Lynn Haven, Fla., though the Lynn Haven office was destroyed by Hurricane Michael.

Hutt said with some carriers, policyholders have received initial estimates from insurers that are far below what a contractor tells them the damage will cost, which creates a sense distress for those customers.

“I hope that with future storms we can improve that piece of the communication,” Hutt said.

Hutt noted there is currently a lull in the recovery process, which is common after a catastrophe event, where people have submitted their claim and had their initial visit from an adjuster and are now waiting to hear from a desk adjuster, which can take up to 10 business days in some cases.

“People are very nervous when there is silence at the other end of the phone,” Hutt said.

A J.D. Power survey of policyholders affected by Hurricane Michael found 87 percent of policyholders said their insurer had “met or exceeded expectations,” in their response efforts.

Altmaier emphasized that as claims remain open, OIR is continuing to communicate with the industry to ensure any unmet needs that may hinder a company’s ability to provide a seamless claims-filing process are addressed, including assignment of benefits abuse. Regulators and the insurance industry have been concerned a large-scale disaster such as Hurricane Michael could exacerbate the problem and have devoted significant resources to educating consumers about AOB abuse and the dangers of signing an AOB agreement.

The Florida Department of Financial Services has also deployed post-disaster fraud strike teams to the Florida Panhandle region and is “searching for anyone trying to prey on residents,” DFS said in a statement last month.

Florida Insurance Commissioner Altmaier and CFO Patronis have urged the industry to respond to policyholders as quickly as possible to help policyholders avoid being taken advantage of.

“A tremendous effort to ensure claims are being handled expeditiously has been made — an effort that will continue throughout the entirety of this recovery,” Altmaier said.

Topics Catastrophe Natural Disasters Florida Claims Hurricane Agribusiness Market Mexico