In brief
- The 1926 Great Miami Hurricane caused profound destruction, plunging the city into a deep economic downturn.
- Miami’s population and number of housing units have grown significantly since 1926, meaning that a similar storm could cause much more destruction.
- Climate change has heightened the risk, because rising sea levels, and increase in intense hurricanes, and wetter, slower-moving storms can lead to more damage than in the past.
- Four modeling groups have estimated that a repeat hurricane hitting Miami would cause hundreds of billions of dollars in damage, potentially exceeding the costs of Hurricanes Katrina and Harvey.
- Ripple effects of a repeat storm would likely include spikes in insurance premiums, a significant downturn in the Florida real estate market, stress to municipal bond markets, and population decline.
“The 1926 hurricane has become a benchmark in South Florida history, a dividing point in time, much like B.C. and A.D. It has achieved a mystique of almost biblical proportions — akin to Noah’s flood or the destruction of Sodom and Gomorrah.”
So wrote Miami historian Arva Moore Parks in her introduction to a 1986 reissue of the 1926 book by L. F. Reardon, “The Florida Hurricane & Disaster.” Only two other U.S. hurricanes have achieved a similar level of mystique: The Great Galveston Hurricane of 1900 and Hurricane Katrina of 2005.
The 1926 Great Miami Hurricane struck South Florida on September 18, 1926, with the eye of the large Category 4 hurricane passing over downtown Miami and Miami Beach. The catastrophic storm killed 220 in southeastern Florida, injured over 6,000, destroyed thousands of homes and buildings, and left tens of thousands of people homeless. Thousands of newcomers to Florida left the state and cleared their bank accounts, leaving many banks on the brink of bankruptcy. The 1920s Florida land boom ended abruptly, and a profound economic downturn resulted, plunging Miami into its own Great Depression three years ahead of the rest of the nation.
A repeat storm would cause more damage
The 1926 Great Miami Hurricane caused an estimated $105 million in damage in 1926 dollars ($2 billion in 2026 money).
But a similar storm today could cause a lot more destruction. In 1926, the population of Miami-Dade County was a mere 100,000. From 1926 to 2022, the population increased by a factor of about 23, while the number of housing units grew by a factor of about 41.
A 2026 paper, Normalized Continental US Tropical Cyclone Damage Estimates From 1900–2023: An Updated Methodology and Expanded Data Set, studied how increases in wealth and population have combined to increase the damages of historic hurricanes had they hit the U.S. in 2023. Given the increase in population and housing units that has occurred since 1926, and since wealth in the U.S. has increased by at least 3% per year since the 1920s, the authors estimated that if the 1926 Great Miami hurricane were to hit in 2023, its total economic damage (insured plus uninsured) would have been $218 billion in South Florida, making it the costliest weather-related disaster in world history. (The storm also made a second landfall near the Florida/Alabama border, which would have cost an additional $25 billion.)
But this simple analysis left out many factors that would cause either an overestimation or underestimation of damage.
Factor leading to overestimation: Changes in building codes
The research assumed all housing structures existing in 2023 were built to the same structural integrity that they were in 1926. That’s not true.
Factor leading to overestimation: Improvements in hurricane forecasts
A 2024 study by the nonprofit, nonpartisan National Bureau of Economic Research, The Social Value of Hurricane Forecasts, found that recent advancements in hurricane forecasting for 18 continental U.S. landfalling hurricanes from 2005-2020 led to a 19% reduction in total hurricane-related costs — an average cost reduction of $5 billion per hurricane. The benefits came either by decreasing deaths and damages or by inspiring confidence in decisions not to spend money on pre-storm adaptation measures. The 1926 hurricane hit with essentially no warning, and the better hurricane forecasts now available would significantly reduce damages of a repeat storm.
Factor leading to underestimation: Highly urbanized cities
The study authors wrote that they were not able to properly handle “highly urbanized coastal zones such as Miami-Dade, Broward, and Palm Beach counties, where exposure is significantly higher in coastal zones as opposed to inland zones within the same county.”
Factor leading to underestimation: the impact of climate change since 1926
There are two main ways climate change can increase hurricane damage in ways this study did not consider.
Sea level rise. Sea levels have risen about 1.12 feet at the Miami tide gauge since it was installed in 1931. So the nine-foot storm tide of the 1926 hurricane at Miami Beach would exceed 10 feet today, resulting in a substantial increase in storm surge damage. As seen in Fig. 3, the area inundated by a Cat 3 storm surge vs. a Cat 4 is considerable. A 1.12-foot rise in sea level is not quite equivalent to this difference, but you get the idea.
In an email, Dr. Sylvie Lorsolo, Director of hurricane winds and storm surge modeling for the catastrophe modeling company Verisk Catastrophe and Risk Solutions, described how the company’s software modeled the 1926 Great Miami Hurricane under two sea level regimes: an estimate of 1926 sea level, and a projection of historical data to the near-present climate:
The 1926 sea level simulation produced minor flooding along the Biscayne Bay coastline, up the Miami River, and on Key Biscayne. In the projected sea level simulation, peak water levels in Biscayne Bay were roughly 12-16 inches (30-40 cm) higher than in the 1926 sea level simulation. That difference translated into localized increases in inundation — most visibly on Key Biscayne and along the inland waterways that already flooded in the 1926 version of the event — where areas near the edge of the historical flood footprint saw water reach somewhat further inland.
This seemingly small amount of sea level rise that has occurred since 1926 can lead to significant damage during a storm surge event. Why?
To use a sports analogy, it’s because the interaction of a storm surge with a city is a game of inches and thresholds. Coastal cities are generally designed so that it takes a one-in-100-year event (one that has a 1% chance of occurring in a given year) to cause substantial flooding. A storm surge must rise to the base height of the city before it can flood large areas. But once the storm crosses that threshold, every inch of additional rise in water levels can flood large areas. And since just one inch of water in a 2,500-square-foot home can cause $27,000 in damage, and 12 inches can cause $72,000 in damage, a few extra inches of storm surge can add up in a hurry.
To illustrate this point, as much as $8.1 billion of the $62.5 billion in damage (2012 USD) caused by Hurricane Sandy in 2012 in New York, New Jersey, and Connecticut resulted from the 3.8 inches (9.6 cm) increase in sea levels caused by human-caused climate change, according to a 2021 paper by Climate Central scientists. Without that extra water, the storm surge in the Tri-State area would have affected 71,000 fewer people and 36,000 fewer housing units.
Increased heavy rainfall. Modern hurricanes tend to be wetter because of climate change, because a warmer atmosphere holds more water vapor. Hurricanes over land in the U.S. have also trended to be slower-moving, which increases their rainfall potential. What’s more, when the increased rains from wetter and slow-moving hurricanes meet higher sea levels, there is a drastically higher risk of compound flooding, as we saw with Hurricane Harvey in Texas.
A better way to estimate damage: catastrophe models
A better way to estimate damages is using the sophisticated catastrophe modeling tools created by the insurance and reinsurance industry. In an email, Dr. Suz Tolwinski-Ward, a Vice President and Head of Climate Statistics Research at Verisk Catastrophe and Risk Solutions, called hurricane damage normalization efforts like the one in the 2026 study described above as “wholly inadequate for the quantitative property-level loss estimates required by industrial re/insurance risk managers.”
She maintained that the catastrophe risk modeling tools that Verisk provides to its insurance and reinsurance clients include information derived from deep economic research and analysis of claims data “orders of magnitude more sophisticated than anything I’m aware of within the academic community.”
“For better or for worse, the data needed to do good research on monetary losses from natural catastrophes are simply not openly available, as they are proprietary to each individual insurer or reinsurer.”
Using Verisk’s catastrophe model, the impact of climate change on hurricane storm surge, is taken into account, for example. Tolwinski-Ward explained that her company’s model has been specifically designed to simulate the amount of flooding that would occur with today’s sea levels, not those of 1926. Tolinksi-Ward said:
U.S.-wide, the Verisk model estimates this historical storm would cause $230 billion dollars (2025 USD) of gross insured losses if it occurred today. Over $220 billion of those losses come from the state of Florida alone. Our model puts these losses at about a 1% annual occurrence probability for Florida (a one-in-100-year hurricane).
An additional $50 billion in damage occurred in the model that could have been insured, but was not (what insurers call the “protection gap”). Verisk’s $280-billion estimate of total damage did not include losses that would be covered by the National Flood Insurance Program (NFIP), nor damage to public infrastructure like roads, bridges, and utilities, which are generally not covered by the private insurance market. Total economic damages from a repeat 1926 Great Miami Hurricane could therefore be reasonably expected to far exceed the estimate of insured loss provided by Verisk’s model.
Two other catastrophe modeling firms have published recent estimates of the damages from a high-end hurricane hitting Miami. A 2025 study by Moody’s modeled a Cat 5 hurricane more severe than the 1926 hurricane hitting just south of Miami. That study found that the storm would cause $232 billion in total losses. Karen Clark & Co. found in 2019 that a Cat 5 hitting Miami could cause $200 billion in insured residential property losses alone.
Taken together, the modeling efforts from the four different groups strongly suggest that a repeat of the 1926 Great Miami Hurricane would easily be the costliest weather disaster in world history.
We’re not ready
A 2025 report by insurance broker Arbol estimated that the fraction of total damage for five major U.S. landfalling hurricanes since 2017 that was insured ranged from 19-53%. Hurricanes that cause mostly flood damage tend to have higher uninsured damages, since most flood damage is uninsured.
But South Florida’s Hurricane Ian of 2022 was primarily a wind-damage event, with 53% of its damages being insured. Damages from hurricanes hitting Miami also tend to be wind-dominated, since the deep water just offshore tends to limit storm surge height.
A repeat of the 1926 hurricane could crash the Florida economy
A potential total price tag for a repeat Great Miami Hurricane of over $280 billion is truly startling. This amount is about 1% of U.S. GDP, and much higher than the cost (in 2026 USD) of the most expensive weather disaster in world history — $213 billion from Hurricane Katrina of 2005. And the $280 billion-plus figure is not even for a worst-case hurricane — it is for a one-in-100-year storm, which can be expected to have a 26% chance of occurring in a 30-year period. (Note that the National Hurricane Center says that the return period for a Cat 3 or stronger hurricane hitting Miami is once every 14 years, or 7% per year, Fig. 5).
But with climate change increasing the odds of Category 4 and 5 hurricanes, sea levels rising, and money continuing to pour into Miami to develop this high-risk city, it is likely that a $280-billion-plus hurricane will hit Miami in the next 40 years.
The Florida insurance and coastal property market managed to withstand the $126-billion cost (2026 USD) of Category 4 Hurricane Ian of 2022 (of which 53% was insured), but a $280-billion-plus blow like a repeat of the 1926 hurricane might cause a severe downward spiral in the Florida real estate market from which it might never fully recover. Such a storm would also cause significant multi-year losses to one of the other mainstays of the Florida economy — tourism. A 2025 study that has not yet undergone peer review, Stress testing insurance market stability under climate risk, found about a 4% chance per year (or 34% chance in 10 years) that an extreme hurricane season in Florida could cause multi-billion-dollar losses not covered by insurance that would exceed 1% of the state’s GDP, capable of causing a severe banking crisis.
Meanwhile, developers continue to build in high-risk, flood-prone coastal regions across the Southeast U.S. Moody’s estimated in its “moderate” scenario for a Cat 5 Miami hurricane that in the five years following it, insurance premiums could increase by 60% above recent prices, and nearly triple by the end of 2036.
With this kind of increase, many people would be unable to buy a home, and high insurance prices would cause a spike in mortgage defaults for existing homeowners. This could cause a significant downturn in the real estate market — and also severely stress the municipal bond market, since cities and states finance much of their operations through property taxes. This risk is particularly acute in Florida, which has no state income tax.
Moody’s estimated that a population decline of seven to 20% could result in Miami in the five years following the Cat 5 hurricane they modeled. In other words, such a catastrophe, like the 1926 Great Miami Hurricane, would cleave Florida history into a “before” and an “after.”
And as we saw during the Great Recession of 2008, a real estate crisis can quickly morph into a systemic financial crisis for the entire country, because banks own most of the value, and thus the risk, in housing and commercial real estate. But unlike the great recession of 2008, this hurricane-induced financial crisis could not be fully solved by government intervention, since the underlying causes — more severe hurricanes and increased sea level rise from climate change — are only going to get worse.
Bob Henson contributed to this post.
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