WHAT WAS THE COST OF THE EIGHT HURRICANES IN 2004 AND 2005?

In the last two years, Florida was exposed to six of the most expensive catastrophes in history. Insurance companies paid $35 billion to cover claims associated with Hurricanes Charley, Frances, Ivan, Jeanne, Dennis, Katrina, Rita and Wilma. To understand how much that is, consider that $35 billion is:

• 5 times more than Florida spends on education annually
  

• 8 times more than what the state spends on health care for the poor and elderly annually
  

• More than the state’s 2006-07 fiscal year budget

Here are three primary drivers of the increasing costs associated with hurricane damage:

• Population growth, construction boom
  Florida’s coastal counties have seen about a 75 percent increase in population in the last two decades, and coastal development has kept pace with it. The low-lying coastal counties with the biggest population increases — such as Charlotte, Collier, and Lee — are the same counties with the most significant hurricane damage in the 2004 and 2005 seasons. More construction and more people usually mean higher damage costs.
  

• Coastline exposure
  Florida has approximately $2 trillion in insured coastal exposure, making it the most vulnerable state in the country to natural disaster. This coastal exposure represents almost 80 percent of the insured exposure in the entire state.
  

• Older homes & stronger, more frequent hurricanes
  According to the U.S. census data, nearly 98 percent of the homes in Florida were built before stronger hurricane resistant standards were put into place. The census indicates nearly 60 percent of Florida homes were built during between 1970 and early 1990s - before improved building codes went into effect.
  

  The Institute for Building and Home Safety (IBHS) surveyed homes hit by Hurricane Charley in 2004 and found a distinct difference in damage to homes built to tougher hurricane standards. In Charlotte County, the IBHS study showed that homes built after 1996 were less likely to suffer damage than homes built that year or prior. The reason: In late 1995, Florida’s coastal areas began enforcing high wind standards with improved construction features.