Moody’s: Hurricane Isaias to cost insurers an estimated $3.5 billion

Hurricane Isaias will cost insurers between $2.5 billion and $4.5 billion, with a best estimate of $3.5 billion, according to a new insured loss estimate from Moody's RMS Event Response.

The estimate comes after Isaias made landfall near Destin, Florida, as a Category 2 hurricane with 105 mph winds, becoming the first hurricane to make U.S. landfall since Hurricane Milton in October 2024.

According to Moody's, wind damage accounts for the majority of the losses. Inland flooding, storm surge and National Flood Insurance Program losses are expected to total about $250 million.

"Hurricane Isaias was yet another example of a storm that intensified quickly over the anomalously warm ocean waters in the Gulf, a region that usually sees higher hurricane activity during El Niño years," said Jeff Waters, director of North Atlantic Hurricane Models at Moody's. "Thankfully, the storm encountered strong wind shear as it approached landfall, which disrupted its structure and weakened the windfield considerably."

Key Points

• Estimated insured losses range from $2.5 billion to $4.5 billion, with a best estimate of $3.5 billion.
• Wind damage is expected to account for most losses.
• Flood, storm surge and NFIP losses are estimated at approximately $250 million.
• Isaias made landfall near Destin, Florida, as a Category 2 hurricane with 105 mph winds.
• Rainfall reached up to 7 inches across parts of Florida and Alabama.
• Loss estimates include damage to homes, businesses, industrial facilities, automobiles, watercraft and business interruption.

Earlier Moody's Analysis

Prior to landfall, Moody's estimated that 31,659 commercial properties in Alabama, Florida and Mississippi had a greater than 50% probability of experiencing sustained winds of at least 50 mph. Those properties carried an estimated value of $71.8 billion.

Among the properties potentially exposed were 14,945 multifamily residential buildings with an estimated value of $40.2 billion.

Additional Commentary

"The U.S. energy sector has dodged a bullet," said Chris Lafakis, director of economic research at Moody's Analytics. According to Moody's, refineries closest to the storm's path remained operational and disruptions to Gulf Coast oil production are expected to be temporary.

Earlier this week, Moody's Analytics estimated Isaias would result in $1 billion to $2 billion in lost economic output, reflecting business closures, power outages and other disruptions.

Moody's said it will continue monitoring the aftermath of the storm and provide additional analysis on economic and insured losses as information becomes available.