The Economic Aftermath of Hurricane Ian

ON 10/14/2022 AT 11:56 PM

Ian, one of the most destructive hurricanes ever to hit Florida and the southeastern United States, has left the region with estimated damage of between $66 and $75 billion. Crops, housing, roads, bridges, and all varieties of infrastructure are in ruins.

Fort Myers Beach before and after Hurricane Ian came ashore

Fort Myers Beach in Florida, shown here before Hurricane Ian in a photo on the left taken on August 17, and the same area shot on September 30 after the hurricane's onslaught. Photo: James Levinson, via Twitter

On September 19, the tropical storm that gave birth to Hurricane Ian formed just east of the Windward Islands. It moved relatively rapidly westward, bringing with it at first mostly just winds and heavy rains to the Leeward Islands of Aruba, Bonaire, and Curaçao, and to Trinidad and Tobago. While it was still not even declared a tropical depression, the storm’s large expanse also buffeted the northern coasts of Colombia and Venezuela between September 21 and 22.

Moving northwards into the warmer waters of the Caribbean, Ian transformed rapidly, first into a major tropical depression then to a hurricane. On September 27, it ripped into Pinar del Rio in western Cuba with Category 3 winds rising as high as 125 mph. There it knocked out all electrical power, forced 50,000 to evacuate, and moved many to an array of 55 shelters. Croplands, roadways, homes, and other buildings were wiped out with what local officials called “significant” damages.

Emergency help to Cuba moved in quickly to assist with short-term emergency care, rebuilding electrical infrastructure, and planning for rebuilding. Close allies such as Venezuela sent emergency teams, humanitarian supplies, and equipment to assist with recovery efforts.

After crossing Cuba, the storm moved northwards into the Gulf of Mexico, where the even hotter waters there powered the rapid growth of Hurricane Ian into a Category 4 hurricane with sustained top winds of 155 mph as of September 28. The storm was also wide, with winds of high tropical storm force levels extending as far out as 140 miles.

On September 28, Ian made landfall next at Cayo Costa on Florida’s southwest coast with winds just slightly weaker, at 150 mph, mostly because of the storm approaching land. The winds and forward force of the storm brought with them a storm surge rising 12 to 18 feet at its highest. As Hurricane Ian came ashore, it slashed through the cities of Fort Myers, Port Charlotte, and their surrounds on the southwestern gulf coast of the state, then moved northeasterly across Orlando. After crossing Florida it just barely avoided the populous city of Jacksonville as it exited land areas just north of Florida.

Ian eventually weakened in intensity to tropical storm levels as it made its last traverse across Florida. But when Ian headed back out to sea, this time over the Atlantic Ocean, it intensified again and gathered moisture quickly. After twisting direction again more directly northwards, it eventually made its third landfall on the afternoon of September 30 near Georgetown, South Carolina, with sustained winds of 85 mph. It lost energy again quickly but continued to dump heavy rains as it transitioned into a tropical cyclone over the eastern coast of South Carolina and up across North Carolina. It eventually died out as a formal storm structure by the time it reached Virginia.

As it passed, Hurricane Ian also dumped widespread and mostly unimaginable levels of rainfall along the storm path in Florida as well as out along the coastal areas on either side. In many regions the totals exceed one foot, much of it delivered to a given area in less than one day's time.

In its wake, the city of Fort Myers, which received much of the full force of the winds and rain, left streets flooded, bridges blown out, stormwater systems broken, electrical power grids ripped out, houses flooded out even if they remained standing, and damage to virtually everything present. The impact there covered a wide swath, including the resort region of Sanibel Island, and heavy flooding in parts of nearby Tampa and Sarasota.

Within central Florida, the state’s citrus plantations suffered major harm and the region’s entertainment industry, which includes Walt Disney World, was shuttered with currently unknown impacts on structures there.

Flooding nearby Orlando Florida because of Hurricane Ian

View of roads, homes, and other buildings inundated in Central Florida\'s Orange County as Ian dumped its deluge of rain on the area. Photo: Orange County Sheriff's Office

In South Carolina, heavy flooding and home damage was reported throughout, including in the important coastal cities of Myrtle Beach and Charleston. Farmlands and livestock growing parts of the state are expected to report in with significant long-term damage there as well.

As of October 4, according to Florida’s Office of Insurance Regulation over 282,000 insurance claims have already been filed in the state connected with Hurricane Ian. Those claims total to some $2.04 billion in insured losses. This is already up sharply from October 3’s total claims of 209,940 filings, which amounted to $1.61 billion in total.

Those claims are broken down as shown in the table below.

Lines of Business
Number of Claims Reported
Number of Open Claims with Payment
Number of Open Claims without Payment
Number of Claims Closed with Payment
Number of Claims Closed without Payment
Percent of Claims Closed

Residential Property





















Mobile Homeowners







Commercial Residential







Commercial Property







Private Flood







Business Interruption







Other Lines of Business*














*According to Florida accounting records, the “Other Lines of Business” may include Fire, Farmowners’ Multi-Peril, Ocean Marine, Inland Marine, Private Passenger Automobile Physical Damage, Commercial Auto Physical Damage, Aircraft, Glass, Boiler and Machinery, Industrial Fire, Industrial Extended Coverage, and Multi-Peril Crop.

As of yesterday, 2,574 of these claims had been closed with payments, while 6,169 had been closed without any payment provided.

These of course represent mostly infrastructure, construction, electrical power supply, and rebuilding impacts of the storm which are insurable. Fulfilling these needs will bring a boom to the local construction contracting industry, with some deceitful pricing of goods and services in short supply, just as always happens after disasters of this kind in the United States.

There are many other areas of Florida’s economy beyond this which are strongly affected, both with respect to insured and non-insured losses.

Flower Power and Light Electricity Restoration Plan after Hurricane Ian

Florida Power and Light, the state's primary electrical provider, moved quickly to send out crews to restore power throughout the state. Above is their estimate as of October 4 of when electricity will be back on in areas affected by the storm. Photo: Florida Power and Light

In the state’s important citrus industry, which provides between 70% and 90% of the nation’s supply of staples such as oranges, tangerines, grapefruit, and their juices, depending on the season, early assessments are that the state will see serious short-term impacts but will probably rebound quickly afterwards.

A formal statement from Alico, Inc., a Fort Myers, Florida, based company reported that much of its 48,900 acres of citrus groves in Charlotte, Collier, DeSoto, Hardee, Hendry, Highlands, and Polk counties “sustained hurricane or tropical storm force winds for varying durations of time”. Those winds have produced “significant drop of fruit from trees”, the company noted, with full damage assessments to be made as their teams get to the groves to inspect the situation directly. They also noted that “substantially all of our trees remained intact with the exception of a single grove in Charlotte County”, trying to put a positive spin on things.

Mixon, a citrus producer based closer to Tampa, has already begun direct inspection of its groves. It estimates just under one-third of all its fruit was knocked off the trees and will not be salvageable.

Orange tree after Huricane Ian passed through in Florida

A photo showing typical damage to orange trees after being blown around as Hurricane Ian made it through parts of Florida last week.Estimates suggest at least 30% of the fruit was knocked off the branches by the winds. Photo: Gene McAvoy, via Twitter

Mixon, Alico, and other citrus growers are also moving as fast as possible to prevent a secondary form of damage to their crops. They have brought in pumps and are installing makeshift drainage systems, to remove excess water from the groves. If the water is allowed to sit for long, much root damage would be incurred as a minimum. In the worst cases, leaving the ground soggy could result in trees falling over even in small winds, resulting in complete loss of the trees themselves.

Alico estimates that, based on its past experiences with other major tropical storms and hurricanes their groves have experienced, it will “take at least two seasons for the groves to recover to pre-hurricane production levels”.

Most citrus providers have grove damage and flood insurance. They will apply for benefits after a more thorough assessment is determined. Many are also connected with Florida Citrus Mutual, an industry trade group, to help them lobby for additional federal damage claims to protect the industry from further catastrophic damage.

While the money will provide much needed help, the continued draw-down of insurance monies like this now almost every year by some part of the state will force insurance rates upwards next year for all.

Arlan Suderman, a chief commodities analyst for the financial services firm StoneX, issued a warning shortly after the storm about what may happen next in the citrus industry.

“The market is anticipatory,” he told reporters. “As soon as the hurricane goes through and they make an assessment, they'll be pricing in expectations."

In precise measure with what Suderman said, orange juice commodity prices already jumped by over 15% as of just days after Ian passed. They will  rise even further as winter approaches, more because of scarcity than because the cost of production has changed at all.

A second major commodity category in Florida which is expected to see some price surges, post-Ian, is fertilizer. This is because much of the nation’s supply of phosphate, an important component of fertilizer, is mined and manufactured in the Tampa Bay area, just south of where Hurricane Ian made landfall. A single company there, Mosaic, in fact produces approximately half of all North American phosphate fertilizer.

Though prices of this item will almost certainly rise as damages are fully understood, historically this industry has held price increases down after storms have passed through.

Energy is one of the areas which will also see some temporary price increases in Florida and the southeastern U.S. because of Ian. It will not be because of lack of oil production within the state, which is minimal. It will instead primarily be because fossil fuel companies such as BP shut down oil refinery and drilling work in the Gulf of Mexico in advance of the storm. That, along with difficulties in delivering gasoline and oil in flooded regions, will unfortunately provide an opportunity for localized and regional price gouging.

Calculations of overall economic damage to the United States, especially so for categories which are not covered by insurance, will take some time to prepare.

An early number, prepared by Enki Research based on computer models and available existing data on damages reported particularly in Florida and South Carolina so far, does suggest that when the grand totals of everything is figured out, total damages from Hurricane Ian will probably come in at between $66 to $75 billion. The current median estimate the models predict is $71 billion.

Fort Myers Beach damage from Hurricane Ian

The 202nd RED HORSE Squadron clear roads in Fort Myers Beach, Florida in response to Hurricane Ian, Sept. 30, 2022. Photo: Senior Airman Jesse Hanson

Even these models cover mostly direct damages of the storm, which is already in the top 10 of most economically damaging storms ever and will probably close at in the top 5. Consequential damages, including lost time from work, illness and death caused by exposure during the storm and lack of access to medical care, extended costs from those forced out of their homes and not able to come back, travel and lodging cancellations in Florida from those who had planned to visit and will postpone until next year at the earliest, things such as traffic accidents which tend to go up measurably especially in the early days after a storm, migration out of the state after the fact by those who do not want to live through this sort of disaster again, and even just higher short-term costs for basic necessities such as food, power, and water will drive the real totals billions of dollars higher.

With insurance covering just a small fraction of the actual costs of the storm, the message for the states affected and the Federal government should be that this disaster, which is a direct by-product of increased ocean heating of the Gulf of Mexico and powerful atmospheric patterns associated with it, deserves more attention than just a call for cleanup funds after the fact. The climate crisis is real, we are all paying the price in major death and destruction every time a hurricane makes landfall in the United States, and the situation demands more than just rebuilding.

Publishers Commentary

Florida's Bill 1954 passed last year was a feeble but positive start, but the $141.5 million in state funding plus another $500 million in federal funding it provided won't actually do much to protect Florida's 22 million residents from rising sea levels, extreme heat, hurricanes, storm surges and floods. Instead of striving for merely increased resiliency, which is the state's current posture, it is necessary to accept that catastrophic runaway climate change is upon us and the threat will grow progressively severe. Climate tipping points have all been exceeded and no matter how much humans reduce their greenhouse gas emissions — which have so far only increased since the Kyoto Protocol in 1997 — it is now too late to preserve our current way of life and if we don't wake the hell up and prepare for the future, most of humanity won't have any future.

Our current civilization was based on and made possible by cheap and abundant fossil fuels that provided enormous amounts of easy-to-use energy. But it came at a very steep cost of heating the planet through the well-proven greenhouse effect. Trapping increasing amounts of energy on the planet of course alters the climate and changes everything. It makes the planet less inhabitable and less hospitable for the species that evolved to live here, including us.

In addition to radically altering the Earth's atmosphere we also destroyed most of its forests and polluted every corner of the globe with toxic chemicals, which is of course also causing the mass extinction of life. This greatly reduces the planet's ability to absorb the excess atmospheric CO2.

Most humans are far removed from nature and don't see the destruction and loss of life and just don't want to think about it and don't want to hear about it. For those who do choose to think about such important things, it is deeply disturbing and overwhelming, but there is hope.

A climate-proof and truly sustainable civilization is indeed possible, but it looks much different than our old and obsolete civilization. You can see this new civilization under development at