Twenty-six feet of water surged through the building housing the Village Potters art collective in Asheville, North Carolina, during Hurricane Helene.

“It flooded all the way to the second floor – 37 wheels, 17 kilns, tables, rolls of slabs, I mean, it’s, it’s astronomical,” said Sarah Wells Rolland, who helped found The Village Potters with her husband in 2011.

Eighty to one hundred students took classes there each week. Potters from all over the country went there to take workshops or do residencies. Others would find mentoring there: “we help them organize their projects and their business plan and become a professional potter, then we support them and dream with them.”

The only traces remaining are the building’s 16-inch-thick concrete walls and piles of debris.

The biggest silver lining has been the outpouring of help from neighbors, friends and strangers.

“So many people came to help us, we put on boots of earth and gloves, we emptied the pots, the wheels and the ovens, and a friend of ours, here where we live, lent us, without any charge , his apple. barn,” recalls Wells Rolland. It’s in the barn that her husband and his volunteers repair the mud-covered engines and salvage what they can.

The second biggest positive may well be the insurance that Wells Rolland had to obtain as a condition of rental.

“We lost about $500,000 worth of equipment, which is $166,000,” she said. Not enough, “but it will definitely help.” Wells Rolland launched a GoFundMe and apply for grants. Its community of artists is looking for a new home.

The total damage caused by hurricanes Helene and Milton is estimated to be 100 billion dollars Or more. Insurance should cover a substantial fraction of this amount.

“For Hurricane Helene we estimated a range of $6 billion to $11 billion and for Hurricane Milton we estimated a range of $30 billion to $50 billion,” said Rob Newbold, the team’s president. Extreme Events Solutions at Verisk. , which provides analytics to the insurance industry.

As huge as those numbers are, analysts say the biggest insurers likely will have no problem covering them.

“There are different types of claims for the insurance industry,” Newbold explained. “One is what’s called an earnings event.”

In the insurance world, a “profit event” is the term used for a catastrophe or situation that could reduce an insurance company’s profits, could eat up a large portion of the premiums it collects, but is otherwise manageable. Hurricanes Helene and Milton were bad for the big insurers. However, it is possible for small insurers to experience another type of disaster.

“A so-called solvency event,” Newbold said.

This is when the damage is so severe that it affects the real viability of the insurance company as a business, devouring its real capital. And it is in these situations that insurance companies themselves need insurance.

“Insurance for insurance companies” is how James Eck describes what we call “reinsurance”. Eck is a senior credit officer at Moody’s Ratings. Even FEMA buys reinsurance. This works because reinsurance only occurs at a certain level of desperation: reinsurers do not constantly pay to insurance companies, and reinsurance companies can spread their risks by selling policies all over the world.

“So a reinsurer may have property exposure in Florida, but they may also have exposure in Japan in the event of earthquakes or typhoons,” Eck said.

The global reinsurance market size was $585 billion in 2023, according to Spherical Insights, and is expected to reach $1.3 trillion by 2033. As with many traditional insurances, bonuses for reinsurance have increased in recent years, in part because of the cost of damage from storms and wildfires.

Major disasters have added to pressure. “After 2022, when Hurricane Ian hit Florida, reinsurance renewals in 2023 were particularly difficult for the industry,” said Tim Zawacki, senior research analyst at S&P Global Market Intelligence.

The reinsurance rates that insurance companies must pay can rise as much as reinsurers say they will, but the insurance rates we pay are often limited by state regulators, putting some insurance companies in a bind . North Carolina insurance companies recently requested permission to increase home insurance rates by more than 50%. They probably won’t get all of it, but they’ll get some of it.

“Whatever the outcome of this case, I believe it will have a significant impact on property owners across the state,” Zawacki said.

At the same time, reinsurance companies are becoming less inclined to cover regular bad weather, leaving insurance companies to deal with it themselves. Sometimes insurers cover less and less, or they fail to do the calculation and then simply stop working in some places. At least one North Carolina insurer said this was the case store closure there even before the recent hurricanes.