As Hurricanes Helene and Milton swept through the Gulf Coast and beyond, tens of thousands of drivers found themselves facing the aftermath of vehicle damage. From flooded cars to crushed trucks, the storms left a trail of destruction that’s now adding pressure to an already rising trend in auto insurance rates.
A Surge in Claims Across Hurricane-Hit Areas
In Florida alone, more than 80,000 auto-insurance claims have been filed in the wake of the back-to-back hurricanes. One couple, Bryan Kerr and his wife, experienced the devastation firsthand when a massive oak tree fell on their Ram cargo van during Helene. Their van, essential to their woodworking business, was declared a total loss.
Their story mirrors what many are experiencing: vehicles flooded, battered, or even burned in the chaos of the storms. Moody’s estimates auto-related losses from Helene and Milton could reach between $3 billion and $5 billion, accounting for roughly 10% of the overall insured damage caused by the hurricanes.
Auto Insurance Costs Likely to Rise in Storm Zones
For many, the hurricanes couldn’t have come at a worse time. Auto insurance rates have already been climbing, with premiums rising 16% year-over-year in September, according to the Labor Department. While some areas were seeing the pace of rate hikes slow, the destruction caused by Helene and Milton could reverse that trend, particularly in hurricane-prone regions.
Insurers, still recovering from the blow to their profits, may push for further rate increases. As Josh Esterov, an analyst at CreditSights, points out, these storms could give insurers the leverage they need to justify higher premiums with regulators.
Flooding and Storm Surge Drive Vehicle Damage
Much of the vehicle damage from the storms was caused by inland flooding and storm surges—factors that left drivers with little time to act. Unlike home insurance, which often excludes flood coverage, most auto insurance policies cover both wind and water damage from hurricanes. For drivers like the Kerrs, this meant their van was covered, but they still face uncertainty with other property losses that may not be insured.
Insurers See Mixed Impact on Profits
Despite the billions in damage, major insurers aren’t sounding alarm bells just yet. Companies like Travelers and Progressive have built hurricane losses into their pricing models. While they’ve reported higher catastrophe losses this year, they’ve still managed to maintain profits—helped by the significant rate hikes in auto insurance premiums over the last two years.
Progressive, for instance, added around two million new auto policies in the first half of this year alone, signaling that insurers are still hungry for growth, even as they weather the financial impact of these storms.
What’s Next for Auto Insurance?
While the long-term impact of Hurricanes Helene and Milton is still unfolding, one thing is clear: drivers in hurricane-prone areas should brace for the possibility of rising insurance costs. As insurers work to recover from the damage, many could use the storms as a reason to push for further rate hikes, putting additional strain on consumers already facing higher premiums nationwide.