Hurricane Ian and its damages have dominated the news cycle over the past week. Now that the hurricane has hit, the clean up efforts have started. With all the rebuilding and repairs that need to place on properties across the state, Florida's insurance agencies are feeling the pressure.
Due to the relatively high degree of risk that comes with living in Florida, the state's insurance agencies are already a mess. The COVID-19 pandemic started a wave of closures for insurance agencies. There have been over twelve agencies close and dozens are in danger of going out of business. This problematic trend is exacerbated by the unwillingness of large insurance agencies to work in the area.
The estimated cost to repair the damage from Hurricane Ian is $250 billion. With this large estimate, Floridians face two major issues. First, insurance agencies may not have enough to insure all their client's damage. Second, the declining supply of insurance in the state will cause people to have to pay more for coverage. Currently, Florida has some of the highest insurance rates in the country with many stipulations on benefits. Governor DeSantis and President Biden have worked together to alleviate some of the economic pressure that may result from Hurricane Ian. They have employed a "disaster declaration" across most of the state. Under this declaration, Floridians will have the opportunity to receive grants to help fund temporary housing and repair costs. They will also be able to obtain loans to help with damages that will not be covered by insurance.
It appears that Hurricane Ian is shaping up to cause horrific damage to Florida's economy. To exacerbate this damage, the current climate of insurance agencies is tense and inflation is causing prices to rise. It will be interesting to see how Florida responds to this major supply and demand imbalance they face.
https://www.yahoo.com/gma/hurricane-ian-could-cripple-floridas-164500343.html
It’s interesting to see how GDP is impacted by natural disasters and especially how insurance rates are impacted. I am curious to see how GDP and rates are impacted after Florida begins to be repaired and things begin to return to normal
ReplyDeleteIt's crazy to think how much a natural disaster can completely decimate a community's economy. It'll be interesting to see how the insurance companies react to the pressure and also it'll be interesting how the government will contribute to the rebuild of this horrific event.
ReplyDeleteI wonder if the insurance companies that are currently in Florida had some cash reserve saved for situations like this. I'm sure this could help cover many people, but will probably not be enough to cover everybody. Also, a way that Florida can combat this upcoming inflation is to reduce the money supply in the state and hopefully encourage people to start buying things in the economy shortly after the disastrous Hurricane Ian.
ReplyDeleteAs the hurricane Ian passes out of Florida, the damages caused by it are now being seen. Nearly all homes and buildings in cities like Fort Myers, that saw some of the worst of the storm, have seen intense damage and destruction. If Florida's insurance agencies and system is already unstable, cleanup and repairs for Florida's citizens will be troublesome. While Florida's governor and President Biden appear to be taking proactive steps with the loan grants and such, I am unsure if it will be enough after seeing the amount of damage done to the state as a whole.
ReplyDeleteAll over the news and social media, we have seen the drastic affects Hurricane Ian has had on Florida. Houses have been flooded and/or destroyed, cars have been swept away with the current, boats have moved ashore, and lots of roads have been completely swept away. The extreme amount of damages is overwhelming and will need to be taken care of. Many people have been impacted by this hurricane and while I believe that the insurance companies and government will do the right thing, there is only so much money they can give out. This hurricane will cause a large change in the economy and I'm interested to see how long it takes for the economy to return back to "normal."
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