Hurricane’s Financial Aftermath

In just six weeks, Florida and the southeastern United States were smashed by four of the top 10 costliest disasters in U.S. history.

Hurricanes Charley, Frances, Ivan and Jeanne racked up over $20 billion in insured losses, which, at most, represents only half of the total loss. Every fifth home in Florida was damaged and an estimated 37,000 were destroyed. More than 2.1 million claims have been filed. Taken together, only the 9/11 terrorist attacks (including property, liability and life insurance) cost insurers more than the four hurricanes.

The losses would have been much higher to the insurance companies, however, had they not raised deductibles on Florida homeowners in the aftermath of 1992’s Hurricane Andrew. While a typical U.S. policy has a $500 deductible, about two thirds of Florida’s homeowners have a 2 percent deductible for hurricane damage. For example, if a home is valued at $200,000, the homeowner pays the first $4,000 in damages! Some deductibles are as high as 5 percent. The strategy saved the insurance companies billions of dollars this time around, but how much more can the homeowners withstand?

Meanwhile, some economists argue that hurricanes are actually good for the national economy—that the losses from disruption and destruction are more than offset by the stimulus provided through rebuilding efforts. They point to the 71,000 construction jobs created in October and the extra 48,000 jobs added by temporary staffing agencies—many to help with hurricane-related work.

This argument misses the main point.

God says He controls the weather! Read all of Job 37. “God thunder[s] with His voice wonderfully, Doing great things and we know not. … From the inner chamber come[s] a hurricane …” (Job 37:5, 9; Young’s Literal Translation).

Why does God do this? “Whether for correction, or for his land, or for love, he causes it to happen” (verse 13; New Revised Standard Version). Maybe God is trying to tell us something. What will it take to get our attention?