State Farm, Citizens Prepare for Hurricane Helene Losses

State Farm General Insurance Co. and Citizens Property Insurance Corp. are bracing for the largest losses in the insurance industry from damage caused by Hurricane Helene, which is quickly becoming one of the costliest storms in US history.

State Farm was the top provider of home and auto insurance in Georgia and South Carolina at the end of 2023, according to the latest data from AM Best, and has significant exposure in Florida and North Carolina. The Illinois-based firm said on Sept. 30 that it has received more than 50,000 auto and homeowner complaints related to Helene and expects that number to rise.

In Florida, where Helene made landfall last week for the first time, with winds reaching 140 miles per hour, state-backed Citizens is the state’s largest insurer. It had received about 10,000 complaints as of Tuesday, a company spokesman told Bloomberg News.

Related: Hurricane Helene Shuts Down Bird Crops, Damages Cotton Crops

The total insured losses from Helene will not be clear for months at least. The storm wreaked havoc from Florida to Ohio, bringing catastrophic flooding and leaving more than 100 people dead and millions without power.

An early projection of AccuWeather Inc. predicts that total economic damage — a measure that includes lost wages, canceled flights and supply chain disruptions — from Helene could reach $160 billion, making it one of the five costliest storms in U.S. history.

But the insured losses can be much smaller. Flood damage is usually excluded from standard property policies. Homeowners must purchase additional coverage from a private insurer or the National Flood Insurance Program.

Related: AccuWeather puts total damage and economic losses from Helene at $145 billion to $160 billion

“Unfortunately, less than 1 percent of homeowners in the hardest-hit areas outside of Florida had flood insurance,” said Robert Gordon, senior vice president of policy, research and international for the American Homeowners Association. “Flood losses are the most common natural disaster, but most homeowners outside designated flood zones did not obtain coverage. According to FEMA, even in Florida’s high flood risk areas, only 35 percent of structures have protection.”

Property owners in Georgia and South Carolina have less flood coverage compared to people in Florida, which has been hit regularly by storms. Relative to each state’s economy, Florida has five times more private flood insurance than Georgia and nearly 14 times federal flood coverage, according to Bloomberg calculations.

On Friday, before Helena’s continued damage over the weekend, Corelogic estimated insured losses of up to $5 billion. AM Best designed at least that much, if not more.

Related: Helene triggers flooding, knocks out power to millions

Hurricane Ian was the costliest storm in recent years, with insured losses exceeding $50 billion.

Top photo: Storm-damaged goods sit along the road after Hurricane Helene in Old Fort, North Carolina, on September 30.

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