Author: Felicia Mo
The BRB Bottomline:
Hurricane Ian is not only a call for Florida homeowners to get flood insurance but also sheds light on the financial impact of costly weather disasters caused by climate change.
On Wednesday, September 28th, Category 4 Hurricane Ian swept in from the Gulf of Mexico and hit Southwest Florida, bringing 150mph winds and up to 15 inches of rainfall to some counties. The next day, President Biden declared nine Florida counties as disaster areas, and the Federal Emergency Management Agency (FEMA) opened federal funding for emergency relief in those counties. Classified as 2022’s latest billion-dollar disaster, Hurricane Ian has created extreme financial distress in Florida, in turn causing ripple effects across the country that serve as a sobering reminder of the costly impact of natural disasters caused by climate change.
Disaster in Dollar Signs
The latest estimates say Hurricane Ian has already caused more than “$47 billion in insured losses,” but that number could go up to an estimated $67 billion. What’s worse is that only 30% of residents from the nine specified disaster counties have federal flood insurance, leaving 1.3 million uninsured and vulnerable. Furthermore, those insured still face an insurance crisis caused by the massive damage costs from Hurricane Ian, which has already rendered several Florida insurers insolvent (unable to pay their debts). In fact, the Insurance Information Institute, a research nonprofit, estimates that over 400,000 Floridians have lost their insurance in 2022 because overwhelmed insurers defaulted on their payments and stopped writing new insurance policies. President Biden announced that victims could “request up to $37,900 for home repairs… and another $37,900 for lost poverty, if not covered by insurance” from FEMA, but those amounts usually only cover a fraction of the cost to rebuild and recover.
Moreover, the current inflationary environment of the United States exacerbates disasters like Hurricane Ian as exports from affected areas have their prices driven up by supply shocks. Luckily, Florida is not a major producer of oil or food (besides citrus fruits), so those staples are more or less safe from additional price hikes. Florida does account for 70% of the citrus fruit production in the United States, however, so produce like grapefruits and tangerines may see an increase in prices in the aftermath.
Increasing a Billion-Dollar Trend
Hurricane Ian is just one of the nine billion-dollar disasters that have already occurred in the first six months of 2022. That number is on track to reach last year’s figure, when there were 20 billion-dollar disasters that dealt a total damage of $152.6 billion. Natural disasters pose a serious issue every year, both financially and environmentally. In fact, the disasters that have occurred in the “last five complete years” cost “more than one-third of the disaster cost total of the last 43-years.” In short, climate change has made these natural disasters more violent, more expensive, and more frequent. A study in 2020 — a year with a record 22 billion-dollar in disasters — showed that “hourly rainfall amounts during the 2020 Atlantic hurricane season [increased] by up to 10% compared to pre-industrial levels.” If the trajectory of billion-dollar disasters continues, we will see more catastrophes befall the U.S. with ever-increasing economic damages, straining further an economy already close to its maximum capacity for stress.
GoFundMe.org recently created a relief fund to help victims of Hurricane Ian. Donate here.