Hurricane Helene Leaves Death and Destruction in Its Wake

Thursday night at 11:10, category 4 Hurricane Helene landed at Florida’s Big Bend region, just east of the mouth of the Aucilla River and 45 miles east-southeast of Tallahassee, Florida. It was the strongest hurricane ever to land in that area.

Winds at 140 miles per hour were ripping apart things in their path. Moving northeast across Georgia, South Carolina, Tennessee, North Carolina, and Virginia, the storm brought “catastrophic, historic flooding,” according to the National Hurricane Center. By the time it was no longer a tropical storm, Helene had left at least 94 dead and more yet to be accounted for.

Although it is still too early to calculate the total value of property lost, the damage was vast. Early estimates made before landfall diverged widely. Moody’s did a broad estimate of commercial properties in many parts of Florida that might have been in the storm’s path, but most of which weren’t. About 162,000 CRE assets with a greater than 50% chance of facing wind speeds of at least 50 miles per hour, a velocity at which some damage is likely, had an estimated total value of $425.9 billion.

Tallahassee, near enough the landing spot, had 5,153 commercial buildings with an estimated total of $8.7 billion, and those included only ones in Moody’s commercial real estate database. The total included 787 industrial, 1,577 retail, 1,474 office, 1,259 multifamily, and 66 hotel buildings.

A report from reinsurer Gallagher Re projected losses of $3 billion to $6 billion. “Any shift in track to the east or west could make the difference in billions of dollars with final economic and/or insured loss costs,” Gallagher Re said.

Damage swept north at least 800 miles from the point of entry, reported the New York Times. Entire communities were warned to evacuate.

The reports of disaster culminate in examples that are dumbfounding to view. Ashville, an historical village in North Carolina, was largely underwater. Immense flooding swept vehicles and structures swept along. Pictures show some one-story buildings almost submerged. According to the Times, “Ryan Cole, the assistant director for emergency services in Buncombe County, which includes Asheville, called the storm ‘the most significant natural disaster that any of us have ever seen in Western North Carolina.’”

There is no way to tell how high the insurance bill will be. Adjusters can’t get into many areas, let alone provide projected losses. Much of the attention initially was focused on Florida as facing the assumed worst battering.

A second wave of damage concerns involves insurance companies themselves. Insurance officials in Florida and the state’s governor, Ron DeSantis, have claimed that all would be well, according to Politico.

“The insurance industry is well-capitalized to act as financial first responders to their impacted customers and handle a high volume of storm claims from Helene,”  Mark Friedlander, a representative of the Insurance Information Institute, told Politico.

But as Bloomberg reported, there are signs of problems in sunny paradise. Seven Florida property insurers that had all been rated as financially stable by Demotech were liquidated in 2021 and 2022. And 20% of property insurance companies in business in Florida between 2009 and 2022 became insolvent according to a research paper out of Harvard. Is the new damage going to put too much pressure on insurance companies in Florida?

There are also all the other states with extensive damage and no way to know at the moment what might happen to the broader insurance industry.