Moody’s Analytics doesn’t mince words in a report release last week about a hypothetical Category 5 strike on Miami-Dade: “An Andrew-style Category 5 hurricane hitting Miami would have devastating consequences for the local economy,” the firm says. “We find that a hurricane of this magnitude hitting Southeast Florida would be worse than a typical recession.”
The report models two paths after an August 2025 landfall: a moderate scenario with robust federal aid and a severe scenario without it.
In both, “severe winds and flooding destroy households, businesses, private property and public infrastructure, causing more than $200 billion in economic damages,” eclipsing Hurricane Katrina’s $195 billion price tag
Moody’s Modeled Devisation
Moody’s selected a single, extreme but plausible event from thousands of stochastic simulations.
The chosen storm is a Category 5 hurricane that makes landfall in Homestead, Florida, fifty kilometers south of Miami. It causes a modeled economic loss of $232 billion in Florida, $212 billion of which is located in the tri-county area.
“A little more than half of the modeled losses are insured,” the report notes, leaving a massive gap for households and businesses.
And while extreme, the event isn’t unimaginable: “Based on Moody’s RMS models, the probability of an event equaling or exceeding this economic loss magnitude in Florida in any given year is 2.5%.”
Insurance Shock: 53% vs. 300%
Insurance availability, or the lack of it, is the hinge on which the region’s recovery swings. “Aggregate homeowners insurance premiums in Florida are expected to rise 53% over three years in the moderate scenario.”
