Hurricane season officially starts June 1st and with inflation hitting the pockets of many residents, it can be difficult to think of preparing for the storm. WMFE鈥檚 Talia Blake spoke with Sean Snaith, director of the Institute for Economic Forecasting at the University of Central Florida, about how hurricane season can bring a storm to your finances.
Sean Snaith is the director for the Institute for Economic Forecasting at the University of Central Florida. (photo: Sean Snaith)
The Price of Prep
Preparing for a disaster can be pricey, but Snaith said it can be worse the closer you get to a storm. 鈥淚f you鈥檙e like me, and you wait till five hours before the hurricane is about to hit, and you have to pick over what鈥檚 left on the shelves, 鈥� Snaith said. 鈥淎nd so I can remember, I think it was Irma, I waited pretty late in the game. The only water I could get was Voss water in a glass bottle, and the only candles left were like religious votive candles. So, that was kind of an expensive prep.鈥�
The Price of Damage
Whether you鈥檙e on the coast or you鈥檙e more inland, even the most prepared person can鈥檛 win against a very damaging storm. UCF recently created a tool called which can show you how resilient your home is to natural disasters, like hurricanes, and tell you the estimated cost.
Snaith said between inflation and supply chain issues, fixing any damage could be difficult this hurricane season. 鈥淲e鈥檙e in a situation now, if a storm hit, and you had to prepare damages to your home or to structures, the cost of materials is so much higher for other reasons that that鈥檚 going to boost the cost of repairs,鈥� he said.
Even if your home is fully insured for hurricane damage, Snaith said there鈥檚 a percentage limit that you have to pay yourself before the insurance company starts to help with costs. 鈥淚t鈥檚 not a few 100 bucks, it鈥檚 several $1,000, typically seven $8,000, depending on the value of the structure that you have to pay out of pocket before the insurance company starts to pick up the remainder of those costs.鈥�
Effects On The Overall Economy
In 2017, UCF鈥檚 Institute for Economic Forecasting did an analysis of the impact of hurricanes on the economy in Florida. For each hurricane, they examined the counties that were most directly affected and what it that mean for the economy. 鈥淏ecause inevitably, after a hurricane, you鈥檒l see some news report or some commentary that says, 鈥榦h, it鈥檚 really good for the economy,'鈥� Snaith explained. 鈥淲hich I think is one of the biggest and persistent myths about hurricanes, that somehow it triggers economic growth.鈥� Snaith said that鈥檚 like saying, 鈥淲ell, if you destroy your economy is a good way to help grow your economy.鈥�
For example, if you run a roofing company, hurricanes can be good for your business. 鈥淏ut, if you look at the larger economy, if you know that roof that鈥檚 being repaired, was on a restaurant that has to shut down until all those repairs are done. But what about all the meals that would have been served from that restaurant? What about the owners income and their employees incomes that are no longer being made?鈥� Snaith explained.
Snaith said there鈥檚 a flow of economic activity that spikes up because of the hurricane, but a lot of that flow is just replacing what we had pre-hurricane. 鈥淎t the end of the day, are you are you really better off as an economy for having suffered a natural disaster? And the bottom line is no,鈥� Snaith said. 鈥淏ut the recovery from that, looking at it historically, tends to be pretty rapid.鈥�
Copyright 2022 WMFE. To see more, visit .
