Helene, Milton put insurance industry to the test

With untold numbers of properties wrecked by Hurricanes Helene and Milton in recent weeks, homeowners across the Southeast will be in close contact with insurance agents until their claims are resolved. 

Experts say it's not the end of it: Climate change is only going to intensify the frequency and expense of claims going forward. And disaster losses along the coast are likely to escalate in the coming years, partly because of huge increases in development, said Loretta Worters, a spokesperson for the Insurance Information Institute.

"Losses related to natural disasters have increased tenfold," Worters said.

Early estimates put the total damage and economic losses in Florida from Milton between $160 billion and $180 billion, according to AccuWeather. Helene, which made landfall in Florida before taking aim at North Carolina and several other states, is estimated to have caused at least $11 billion in private market insured losses. Only two years ago, Hurricane Ian resulted in more than $50 billion in losses in south Florida. Compare that to Hurricane Katrina in 2005, racking up $65 billion in damage (adjusted to more than $101 billion in 2023 dollars).

While the exact numbers from the latest storms are still shaking out, FEMA has already granted $344 million to victims of Helene, which killed more than 200 people across six states. On Friday, the death count from Milton was at least 16.

Even before the pandemic, property and casualty insurers struggled to maintain profitability, but premium rates have not kept up with rising costs, Worters said. The Institute's three-year economic analysis of the pandemic shows inflation related to homeowners' replacement costs rose 55% and continues rising, she said, adding to the price of insurance coverage.

If insurers are unable to meet their financial obligations, it leaves policyholders without coverage when they need it most.

Get it going

As people begin the recovery process, one of their first calls is to their insurance company, which can be "a very emotional time for people, some of whom have lost everything,” Worters said.

Some companies visit communities in disaster-affected areas and hold events to connect policyholders with agents. Whether residents attend those, or make a call, fill out an online form or download their insurance company’s app, the most important thing to do is to get the ball rolling and open a claim as soon as possible. It can take a while to get through the process and nail down a contractor — who may have trouble getting supplies, causing further delays.

The right kind of coverage is also needed. There’s a distinction between flood loss from surging water and rain and damage from hurricane winds. While most of Helene’s destruction was from flooding, Milton caused more windstorm losses, Worters said. And if a home is in the crosshairs of two hurricanes, two separate claims will need to be filed, Worters said.

Understand the coverage

Residents of western North Carolina certainly didn't anticipate being inundated by a hurricane. But even in areas that typically don't face powerful storms, wildfires or floods, climate change is throwing intense monkey wrenches into what is expected.

Experts recommend that in addition to covering damage, residents should ask about additional living expenses, such as food, baby supplies and lodging as they figure out next steps. FEMA gives a $750 cash grant that doesn't have to be repaid and can offer immediate help.

Not only is it important to understand the extent of loss, but it’s crucial to know what is covered, experts said. “The policyholder must read the policy. All of it. Every. Single. Page. If they don't understand something, talk with their agent or the company,” said Chantal M. Roberts, author, professor and an expert witness for insurance companies and the insured.  

But assistance doesn’t stop at private insurance payments. Further FEMA grants are available, and residents and businesses are also eligible for low-interest loans with the Small Business Administration to repair and replace property. 

Landlords may not be required to compensate renters for alternate lodging, and it's recommended that tenants check their leases to learn whether they have credit for the number of days their homes are uninhabitable. Rental insurance may provide coverage — an inexpensive option that can be valuable after disasters.

Injuries and deaths aren’t covered under property insurance in most cases; these are under health and life insurance. Insurance agents can advise about liability coverage if a guest or tenant is injured on a property during a hurricane, however.  

Financials can get tricky

Some folks may want to pick up and leave before repairs have been made and even before their insurance payout has been completed. That’s possible, but not always favorable. There are some complex tax calculations to make, but residents may also be eligible to write off losses. The IRS has granted a tax-filing extension to residents in Alabama, Georgia, North Carolina and South Carolina, as well as parts of Florida, Tennessee and Virginia. May 1, 2025, is the new filing deadline and date to make tax payments in those areas.

Homeowners may also qualify for a mortgage forbearance for 12 months after natural disasters and are advised to connect with their lender to notify them of the status of their home and ability to pay. For an FHA-insured mortgage or one for Native Americans under the Section 184 Indian Home Loan Guarantee program, there is a 90-day moratorium on foreclosures.

More resources

If there are issues with insurance companies, a state insurance office can offer guidance on how to file a complaint. Not sure what to believe in the online rumor mill of misinformation? Check for facts at the FEMA Hurricane Rumor page.

Sometimes a checklist is helpful to know the order of things. The National Association of Insurance Commissioners has a comprehensive website that includes information on what to do before and after a storm.