Although Floridians are just beginning to calculate the damages caused by Hurricane Michael, insurance industry analysts have reported that insurers in the state will be able to survive the heavy hit. Michael landed in the less densely populated Panhandle, and the backup reserves of the small and medium-sized insurance companies that write homeowners' policies in the state should cover expenses.
A preliminary projection of property losses prepared by Karen Clark & Company, a firm that models catastrophes, estimates that Michael will impose claims totaling $6 billion on private insurers. This estimate does not include claims that will be directed to the National Flood Insurance Program. About 60,000 policies from that program cover properties in the counties that took the brunt of the category 4 storm.
A system of re-insurance supports the private companies covering homeowners in the state. The insurers buy these policies from giant global insurers like Lloyd's of London or Swiss Re. The re-insurance funds the companies when they face catastrophic losses. One insurance industry analyst said that insurers in the state have the capacity to cover claims from serious storms as long as they only happen every 10 to 15 years.
Although insurance companies make financial preparations to meet the obligations of their contracts after a natural disaster, they still might attempt to deny claims from policyholders or reduce payouts. Because hurricane damage claims might be met with delays or denials, a policyholder could ask for support from an attorney. A legal representative might uncover answers when an insurance company will not respond to a policyholder's questions. In some cases, an attorney might recommend filing a lawsuit to pursue compensation owed to the person.