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Insurers are taking no chances in preparing for Hurricane Irma as the powerful category 5 storm slogs its way through the Caribbean, devastating the communities left in its wake on its potential path towards the U.S.

Insurers made a full court press to policyholders this week to prepare for what could be the largest storm to hit the state since Hurricane Andrew in 1992.

As of Wednesday night, Irma had barreled through the island of Barbuda and the National Hurricane Center said the threat of direct hurricane impacts in Florida over the weekend and early next week has increased. NHC said it expected hurricane watches to be issued for portions of the Florida Keys and Florida Peninsula on Thursday.

“With Hurricane Irma looming in the tropics, the [Property Casualty Insurers Association of America] urges Floridians to get prepared now,” Logan McFaddin, PCI’s Florida regional manager. “Irma has the potential to bring flooding and property damage not only to our coastal areas, but inland. Sadly, Hurricane Harvey shows us the scope of devastation that flood waters can bring.”

The Board of Governors for Florida’s insurer of last resort, Citizens, approved an emergency authorization on Wednesday that the company said would allow it to respond more quickly as it prepares for potential landfall and impacts of Hurricane Irma.

The authorization gives Citizens staff more authority to enter contracts and make purchases of goods and services to prepare for and respond to Irma.

The board also approved a series of pending competitively bid contracts for independent adjusting services to augment already existing agreements with several firms to provide services following a hurricane or other catastrophic event. Citizens said that combined, the contracts secure more than 800 independent adjusters, in addition to Citizens employees, to begin servicing catastrophe claims.

The company has more than 250,000 policies in Irma’s current path, with preliminary projections showing that its claims could exceed 100,000. Citizens said it is increasing its call center capabilities to handle 50,000 calls a day and has three emergency operation centers ready to deploy.

The emergency authorization will make it easier for Citizens to secure additional assistance to respond to Irma, including more flexibility to adjust vendor reimbursement levels to more closely match those of private companies and residual insurers in other states.

The emergency action mirrors an signed Monday by Florida Governor Rick Scott that gives state agencies broad discretion and flexibility in responding to Irma.

“We are looking at all alternatives that are available to us to be as responsive as possible when this event occurs,” Gilway told members of the board.

Citizens spokesperson Michael Peltier said the company sent out email notices to about 240,000 of its policyholders telling people to prepare. He added with many adjusters in Texas after Harvey, resources could be stretched thin in the aftermath of Irma, so the agent community will be even more essential.

“Agents are going to play a critical role in how well not just Citizens, but all insurers, respond to this pending disaster,” he said.

National insurers Nationwide and CNA issued issued statements saying they were ready to serve clients dealing with damage. CNA said its catastrophe operations center in Colorado was fully operational and it has with dedicated information and resources on Harvey and Irma.

Florida-based insurers released a statement through their industry trade group, the Florida Property Casualty Association (FPCA), with .

“Our member companies’ adjusters will be available after the storm to help make disaster victims whole again,” said William Stander, FPCA executive director. “Florida homeowners can rest assured that our member companies are here and ready to help.”

Florida CFO Jimmy Patronis confirmed that there are nearly 200,000 individuals currently licensed to adjust hurricane damage claims in Florida. Insurance companies can appoint (contract with) these adjusters to ensure adequate post-storm availability. Patronis today stressed that insurance companies must be prepared and have an appropriate number of adjusters on staff to meet consumers’ post-storm needs.

The industry is also urging policyholders who suffer damage from the potential storm to be on alert of repair vendors who ask them to assign their benefits from their insurance company.

“Equally as important as being prepared, Floridians should beware of contractors that may come by a home or business looking to provide immediate services before you’ve even notified your insurer,” said McFaddin. “While it may seem like these contractors are trying to be helpful during a trying time, we’ve seen time and time again that there are unscrupulous third-parties looking to prey on those in need.”

Peltier said there are fears in the industry that the aftermath of Irma could escalate the ongoing assignment of benefits abuse, of which Citizens has borne the brunt.

“We are encouraging folks to call us first before assigning benefits to another party, and know what you are signing,” he said.

FPCA also urged consumers to call their agent, or insurance company’s claims hotline, prior to signing any repair contract, “and be wary of giving away their policy benefits and proceeds to a third-party vendor.”

As for if Florida insurers are financially ready to handle a storm like Irma, investors expressed skepticism as stocks for Florida domestic companies suffered losses all week. Heritage Property & Casualty Insurance Co.’s stocks hit record lows on Tuesday and closed down 17.0 percent, prompting its reassuring that the company is well capitalized to handle the losses from a major storm like Irma. The homeowners insurance company had over 236,000 policies in force in Florida as of March 31, 2017.

“With the approach of Hurricane Irma, it’s important to remember that our current year’s program reduced our windstorm retention by half from $40 million to only $20 million for the first catastrophic event. We have approximately $1.75 billion of first event reinsurance in Florida. To put this amount in perspective, Hurricane Andrew, a powerful category 5 hurricane that struck southeast Florida, is estimated to produce a gross loss on our portfolio of $813.1 million.

“Furthermore, our reinsurance models provide that even after enduring a Hurricane Andrew loss, Heritage will only have exhausted approximately 30 percent of its catastrophe reinsurance,” Lucas said.

Heritage had approximately $189 million of statutory surplus as of June 30, 2017 and also has over $600 million of multiyear catastrophe bonds with set pricing, according to the company.

Florida-based Universal Insurance Holdings, which had more than 584,000 policies in force in the state as of March 31, saw its stock drop 15 percent Tuesday.

“We have a tremendous balance sheet, we have a close to 300-page disaster-recovery plan that we began to implement,” Stephen Donaghy, chief operating officer of Universal told Bloomberg on Wednesday. “We’re doing everything you would hope we’d be doing if you’re a homeowner in Florida.”

Peltier said Citizens went a decade without a major storm and is in its strongest financial position since it was established in 2002, and the company feels “as confident as you can on that front.”

FPCA emphasized that Florida insurers can handle a storm like Irma, saying Florida’s Office of Insurance Regulation “requires insurers in this state to have enough capital and reinsurance to pay even catastrophic hurricane losses.”

Patronis said Thursday that Florida’s decade-long hurricane-free streak offered the insurance industry years to prepare, to build reserves, and to update technology.

“Florida’s policyholders fully expect that the insurance companies they entrust to protect their homes will be there during their time of need, and we’ll do everything possible to protect Florida’s policyholders throughout the entire post-storm process,” he said.

Florida Insurance Commissioner David Altmaier said, the Office of Insurance Regulation “is dedicated to constantly monitoring the financial health of insurers, and in the coming days, we will be available around the clock to address any insurer issues.”

*This story has been updated from an earlier version

Topics Catastrophe Natural Disasters Florida Carriers Hurricane Reinsurance Market