Car and boat insurers took a hit from Ian, but reinsurance will help mitigate damage

by | Oct 13, 2022


  • Damage projections from auto and boat losses were initially substantial, totalling several billion between the state’s largest auto insurers
  • New estimates from Progressive Insurance show a significant hit, but reinsurance is reducing the impact
  • Other major insurers, including Geico and State Farm, have yet to report any new claims information

Damage estimates from Hurricane Ian for cars, boats and RV’s are starting to trickle in. While there has been substantial losses expected from Geico, Progressive, State Farm and other large auto insurers, Progressive says it is expecting claims to total about $1.2 billion, but reinsurance will help cut that figure to $760 million. Hurricane Ian’s storm surge did significant damage to buildings, some of which were badly damaged or completely washed away. But the waves, heavy rains and flooding also did a number on cars, trucks, boats, RV’s, motorcycles and other specialized vehicles.

Estimates in the immediate aftermath of the storm, based on computer modeling and risk assessments, predicted that two of the largest auto insurers in the state – Geico and Progressive – would total $2.7 billion by themselves. Geico’s share of vehicle losses were predicted to exceed $1.5 billion, according to S&P Global Intelligence. A separate analysis, based solely on market share analysis and the storm’s path, put the figure for Geico lower, at approximately $1 billion.

Another large insurer, State Farm, which offers coverage on a wide range of private property, including vehicles, reported 10,000 claims had already been filed. The company said at the time that about half of those claims were for automobile damage.

Progressive says about $585 million of that $760 million in losses will be attributed to vehicle damage. Roughly 95 percent of Progressive’s losses were incurred in Florida, with the bulk of the remainder in South Carolina and other states.

“We evaluated and reserved for this catastrophe using our knowledge and experience of reporting patterns from many past storms in addition to several assumptions specific to this hurricane,” the Progressive filing said. It added that “these estimates will change, and could change materially, as additional information develops and claims are reported. We continue to be proactive in the affected areas with the deployment of over 1,500 claim representatives and independent adjusters to serve all of our customers impacted by Hurricane Ian.”

Geico, the state’s largest auto insurer, has yet to report its losses publicly. Statewide, the company has underwritten about 67,000 policies for marine watercraft, which is more than 100,000 fewer than Progressive’s boat insurance total. Only a fraction of those policies were likely in the storm’s path, however.

For comparison, Hurricane Charlie, which came ashore in roughly the same area in 2004, saw vehicle losses totalling approximately $380 million, or about $596 million after adjusting for inflation. There has been substantial population growth in Florida since then, however.

 

1 Comment

  1. Iain

    I plan to retire to Florida. I also plan on having a rather large and expensive boat. Finally, if a hurricane should hit the area I am in, I plan on heeding the national weather service and when I have 3-5 days notice, taking that boat far from the target area.

    I do not understand why someone with a million dollar boat, with three days notice, didn’t jump on it and take a trip to Galveston or NOLA.

    Reply

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