Property insurers have shut the door to buyers of new cover in Florida as the market prepares for the impending arrival of Hurricane Dorian, The Insurance Insider understands.
In some cases, carriers have refused to bind quotes that were offered earlier in the week, with insurers loath to take on more Florida exposure as the storm intensifies.
Dorian is now expected to make landfall as a Category 3 or Category 4 hurricane by early Monday morning. There is still significant uncertainty about where on the Sunshine State’s coast the storm will strike.
The latest data from the National Hurricane Center (NHC) predicts that Dorian will make landfall between Melbourne and Port St Lucie, but the agency has the entire state of Florida within the cone of possible storm tracks.
Sources told this publication that attention is starting to focus on the high net worth insurance market (HNW), which is dominated by Chubb, AIG and Pure. Many beachfront properties in Florida have high enough values to be underwritten in the HNW market.
The excess and surplus lines market is closely watching the impact on habitational property cover, with beachfront condominiums vulnerable to storm surges.
More optimistically, one local agent emphasised that building standards in Florida are stringent, with properties constructed after Hurricane Andrew in 1992 likely to withstand a major hurricane.
But stronger building regulations will not stop storm surge and floods from ruining interiors and causing commercial property and business interruption losses, especially if the storm passes over a major city.
Data from RMS suggests that storms comparable to Dorian, Hurricane Treasure Coast in 1933 and Hurricane Jeane in 2004, have caused between $11bn and $13.5bn in losses in today’s dollars.