RMS, a global risk modeling and analytics firm, has estimated that the insured loss from Hurricane Michael will be between $6.8 and $10 billion. This estimate represents insured losses associated with wind and storm surge damage across Florida, Georgia, and other parts of the Southeast and Mid-Atlantic regions, including losses to the National Flood Insurance Program (NFIP).


The estimate includes property damage and business interruption across residential, commercial, industrial, and automobile lines of business. It also factors in post-loss amplification and accounts for non-modeled losses. RMS expects the majority of insured losses to impact residential lines.


Included in the industry estimate are losses to the National Flood Insurance Program of between $0.25 to $0.75 billion USD.


Unlike recent events such as Hurricanes Harvey and Florence where precipitation-induced inland flooding was the main driver of loss, RMS expects the majority of insured losses from Michael to be driven by wind and storm surge. Economic losses for the U.S. (all affected states) are estimated to be between $8.5 and $14 billion USD. ‘Economic losses’ are losses to all potentially insurable properties, regardless of whether they have coverage or not. It does not include items such as roads and utilities, and government-owned property, often which is self-insured or uninsured.

To arrive at this estimate of loss, RMS simulated wind and storm surge impacts using the latest North Atlantic Hurricane Model (Version 18.0) as well as ensemble footprints, which are hazard reconstructions of Michael’s wind and surge fields informed by observational datasets.


Michael Young, Vice President of Model Management, RMS, said: “This truly was one of the few hurricanes that have exceeded building-level design wind speeds for the region.  Within the tragedy of this event, there are many opportunities to see effective wind and flood mitigation measures and learn how to re-build better and stronger.”


Dr. Mark Powell, Vice President of Modeling, RMS, said: “This event reminds me of the damage level we saw in Hurricane Andrew back in 1992. The intensity of Michael caused significant damage, however Michael was relatively concentrated, unlike hurricanes such as Florence or Harvey which were spread out over a larger geographical area. Michael’s speed and intensity is one of the main reasons that losses from Michael are far more wind and storm surge related rather than flood. In fact, I would not be surprised if Michael is re-classified as a Category 5 event after further analysis.”


Michael made landfall on Wednesday, October 10, 2018 near Mexico Beach, Florida as a Category 4 hurricane on the Saffir-Simpson Hurricane Wind Scale. Michael produced maximum 1-minute sustained wind speeds of 155 mph (250 km/hr) according to the National Hurricane Center, and 152 mph (245 km/hr) as estimated by RMS HWind. This level of intensity makes Michael the strongest hurricane to make landfall in the U.S. since Hurricane Andrew (1992), and the strongest October U.S. landfalling hurricane on record.