Hurricanes Helene and Milton Highlight Insurance Challenges in the Wake of Disasters

Hurricanes Helene and Milton have left a trail of destruction estimated to cost billions of dollars, significantly impacting communities across affected areas. The aftermath has seen many victims facing financial distress, primarily due to the lack of adequate insurance coverage. Experts are warning that as storms intensify, such significant damage may become increasingly common.

Reports indicate that more than 200 people lost their lives due to Hurricane Helene, which impacted six states before Hurricane Milton followed, taking at least 16 lives and leaving millions without electricity. In light of these disasters, insurance companies are now under scrutiny as there are increasing reports of denied claims by property insurers.

According to Martin Weiss, the founder of Weiss Ratings, insurers are expected to face mounting pressures to reject legitimate claims, despite the growing demand for payouts. “Over the long term, we’ve seen a worsening trend in the denial rates by property insurers,” Weiss told Newsweek. This statement reflects a broader analysis conducted by Weiss Ratings, which found significant claim rejections among major insurers in Florida.

The analysis specifically highlighted that Castle Key Indemnity Company rejected 47.1% of claims in 2023. State Farm Florida Insurance Company and Castle Key Insurance Company had similar denial rates of 46.4% and 46% respectively. However, these providers have contested the findings, with a State Farm spokesperson stating that the data is “inaccurate, incomplete, and presented in a way that artificially underrepresents payments.”

Mark Friedlander from the Insurance Information Institute supported State Farm’s position and criticized the analysis by Weiss Ratings for utilizing “cherry-picked insurance claim data without context.” Friedlander emphasized that insurers act as financial first responders during crises, stressing their commitment to customer service and prompt payments.

Despite insurance companies’ assurances, many Florida residents, who face some of the highest home insurance premiums in the U.S., report difficulties in realizing claim payments. Reports suggest that numerous claims, especially flood-related ones, may not qualify for payment under standard insurance policies.

In addition to major insurers, smaller companies such as Kin Insurance Network and American Integrity Insurance Company of Florida also demonstrated high rates of claim denials, exceeding 40% in 2023.

The financial burden of insurance in Florida is extraordinarily high, with average costs for a $300,000 home standing at $5,527 annually in October 2024, considerably above the national average of $2,285. Such elevated expenses further exacerbate the financial strain on homeowners in this disaster-prone state.