Risk Management Solutions (RMS) has announced that potential insured losses could range from $2 to $20 billion based on the latest forecasts for Hurricane Frances. Uncertainty in the storm’s track and intensity increased overnight as Frances slowed down and weakened. Maximum sustained wind speeds in Frances dropped from 145 mph yesterday to 115 mph as of 11 a.m. EDT on Friday, making Frances a moderate category 3 hurricane. The storm is now expected to reach Florida’s east coast some time late Saturday evening or even into Sunday.
The most likely landfall area continues to be the stretch of central Florida coast between Cape Canaveral and north of Palm Beach, but RMS meteorologists note that the uncertainty in landfall is trending further to the north. Exposed property values along this segment of the eastern Florida coast represent about 6 percent of total exposure in the state, comparable to the area where Hurricane Charley made landfall last month in southwest Florida, and significantly less than exposure in southeastern Florida from Palm Beach to the south. Potential losses along the central Florida coast range from $2 billion if the storm weakens further and makes landfall as a moderate category 2 hurricane, up to $20 billion if the storm re-intensifies to a weak category 4 storm and makes landfall in an area with high exposure.
A landfall toward the north passing over Orlando would also cause losses to increase toward the higher end of current estimates. The Orlando area represents the largest single exposure concentration in the storm’s current path, making up about 10 percent of exposure in the state. “This area is still cleaning up from Hurricane Charley,” commented Hemant Shah, president and CEO of RMS. “The combined impact of the two storms could drive up costs of repairs due to limitations in the supply of labor and materials.”
As of early Friday, Hurricane Frances was passing through the northwestern Bahamas. On this track it is forecast to pass over Grand Bahama Island later in the day. In 1999, Hurricane Floyd passed through the Bahamas as a category 4 hurricane causing $400 million in insured losses.
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