Miami Hurricane Damage Could Cost $80B

A direct hit on downtown Miami by the most powerful type of hurricane could cause $80 billion in damage, far exceeding that of Hurricane Andrew, the costliest natural disaster in U.S. history, an insurance industry group reports.

Insured losses from a so-called Category 5 hurricane, with sustained winds exceeding 155 mph, could reach $50 billion, matching the estimated insured damage from the Sept. The total economic loss from such a hurricane could reach $80 billion, the group said.

With the 10th anniversary of Hurricane Andrew only days away, the industry-sponsored group said efforts to reduce economic losses from the next major hurricane have been spotty and many communities had failed to account for natural disasters in their land-use plans. “The financial and market consequences of Andrew were long lasting,” Robert Hartwig, chief economist for the Insurance Information Institute (I.I.I), said.

“Numerous smaller insurers became insolvent and the market for residential and commercial property coverage in coastal areas of the state dried up. Efforts to reduce losses through zoning restrictions or changes in building codes were often resisted by politically powerful developers and home builders,” Hartwig added.

Hurricane Andrew, a Category 4 hurricane whose top wind gusts were measured at about 175 mph, roared across southern Florida on Aug. 24, 1992, damaging or destroying 140,000 homes.

Damage from the storm, one of the most powerful ever to hit the United States, was estimated at $25 billion to $30 billion, including $16 billion in insured losses. But the hurricane’s eye crossed the Florida peninsula in the suburbs south of Miami, leaving the area’s costliest real estate—in downtown Miami and Miami Beach—virtually untouched.

Experts say Andrew’s damage toll would have been much worse had it struck a few miles to the north. Only two Category 5 hurricanes have hit the United States in the past century—an unnamed storm that crossed the sparsely populated Florida Keys in 1935 and Hurricane Camille in 1969, which hit Mississippi and Louisiana.

Topics Florida Catastrophe USA Natural Disasters Hurricane