(Reuters) — Florida-only insurers such as Citizens Property Insurance Corp. are most exposed and vulnerable to losses from Hurricane Idalia, which plowed into Florida's Gulf Coast Wednesday, credit rating agency Moody’s said.

The insurers, which Moody's defines as those with at least 80% of their homeowners and commercial property premiums written in Florida, were expected to face claims for billions of dollars from the storm, adding to a challenging year for the industry that could result in higher premiums for customers.

In Florida, UBS bank estimated average insured losses of $9.36 billion with a 50% chance of losses of over $4.05 billion and a 10% likelihood of losses of $25.6 billion, based on Aug. 28 data. The wide range reflected potential changes in the storm's intensity and path.

Insured losses from Hurricane Idalia will mainly arise from homeowners and commercial property lines and, to a lesser extent, automobile and marine policies, Moody's said.

Losses will be pushed higher by construction costs, which increased significantly during the pandemic, and a rise in demand for construction labor and materials following the hurricane, the report said.

“Idalia is big in terms of the expected impact to insurers,” said Martha Bane, managing director of property practice at Arthur J. Gallagher & Co. "But September, which is peak hurricane time, will likely be worse."

The top 10 Florida-only insurers provide cover to 44% of the state's homes and are more vulnerable than others given their geographic concentration, Moody's said.

Citizens Property Insurance, Florida's nonprofit, state-backed insurance provider that is seen as an “insurer of last resort,” has been gaining market share since 2022 as primary insurers reduce their exposure to the Florida market.

Citizens said on Wednesday it is well-capitalized to pay claims from policyholders whose properties are damaged by storms.

“As insured values have grown, more of Florida's risk exposure has transitioned from larger nationwide insurance carriers to Citizens and smaller Florida domestic insurers, placing more strain on the state's insurance market structure,” Moody's said in a note.

Citizens did not immediately respond to a request for comment Thursday.

Some insurers, including Farmers Insurance, Bankers Insurance and Lexington Insurance, a unit of American International Group Inc., have pulled out of Florida because of the risk of heavy losses, according to a July USA Today report.

The top 10 U.S. homeowners insurers such as State Farm and Allstate Corp. average only about 4.1% of their premiums in Florida, Moody's said.