Hurricane Helene will likely provoke Florida’s already struggling insurance market
The hurricane’s financial damage could top $34 billion, according to Moody’s.
After years of issues plaguing Florida’s insurance market, Hurricane Helene’s devastation is a signal of potentially more challenges ahead.
The hurricane’s financial damage could top $34 billion, according to Moody’s. As Florida continues to struggle luring insurers back into the complicated market after an exodus, some are worried it will only get harder, leaving clients with little options and more demand for lawyers in the space.
Gregory Eisinger, a partner at Florida-based boutique Eisinger Law, has been dealing with the fallout of the state’s growing insurance crisis for years now. He predicts that Helene’s aftermath will only put more pressure on his clients.
“A lot of clients are afraid to make claims because the insurance market is so fickle as it is, that they’re afraid they’re going to get dropped from insurance or their premiums are going to increase more than the amount of damage they’re asking for,” he said.
Eisinger specifically works with homeowners associations and condominiums, which have increasingly seen insurance take up a bulk of their budgets. And because premiums have continued rising, he’s expecting to see more foreclosures in Florida’s housing market as those associations get squeezed further out of their price range.
That trend in particular is rising near coastal areas as condominiums face stricter regulations that went into effect after the Champlain Towers collapse in 2021. Those condos are being bought out by developers interested in replacing them with luxury condos, which is also increasing the lack of affordable housing in South Florida.
Although he and others in the sector have seen premiums stand still in price recently, his clients are still bracing for more damage to the insurance market as each passing storm approaches.
“We got lucky last year, so I think that’s why we’ve seen some insurers come back into the state. But it’s too early to really know the effects of [Helene],” he said. “Given the history, a storm like this does cause some insurance companies to go out of business or leave the state, which ultimately will increase premiums, so I think everyone is on edge for the next storm.”
Fred Karlinsky, chair of Greenberg Traurig’s global insurance practice, agrees premiums have stabilized. But he sees global trends putting greater pressure on the insurance market than local ones, so he suggests that Helene’s impact on premiums may not be as large as some may think.
“Worldwide, we’ve had, this year, more billion-dollar storms and more billion-dollar losses than we ever have in the history of the world,” Karlinsky said. “Not any one of those will really move the needle, but all of them together may have an impact. That said, I think the market, nationally and internationally, is getting healthier. I think in Florida, we’re getting way healthier.”
And compared to Hurricane Ian, which devastated Florida’s Gulf Coast in 2022, Helene brought less damage overall to Florida because it passed over more rural areas, Karlinsky said. Although the storm affected those areas heavily and there was some loss of life, the final bill on Florida specifically is expected to be less, he said.
And in terms of litigation, Karlinsky isn’t expecting a windfall either as he expects claims to be paid out, despite Florida’s recent tort reform measures, which made it harder to litigate claims.
However, with the cost of living going up generally throughout Florida, even a small impact on insurance premiums can have an effect on the state’s affordability, according to Jason Giller, a Miami-based attorney running a boutique that offers full-service to high-end clients.
In particular, Giller is anticipating a new law set in Florida by its Supreme Court, which will cut the time lawyers can take on cases in order to move the court’s backlogged docket along faster.
As a result, Giller is looking to expand his firm’s insurance capabilities as he expects Helene and other factors will continue rising demand for lawyers in that realm, all while other costs also rise. Speaking of his own firm, he’s had to offer attorneys higher salaries to keep up with that increased cost of living, which he admits puts more financial pressure on his clients as well.
“Our clients are also facing, to varying degrees, economic pressure because their business model is being impacted. If you’re a developer, the cost of your insurance premiums is at an all time high, your worker compensation premiums are higher, the cost of financing is higher now. In order for you to retain professionals, whether it’s engineers, architects, attorneys, it’s costing more and more,” he said. “I’m not quite sure how everything is going to shake out, but I think that we’re in for some complicated times ahead. And if I were a betting man, I think there’s going to have to be some glitch bills that’ll have to be passed so that everything can get back to reality.”