TALLAHASSEE, Fla. (The News Service of Florida) — The state-backed Citizens Property Insurance Corp. on Tuesday substantially increased its estimated costs from Hurricane Ian, with the tab now expected to reach $3.8 billion.

Citizens last month projected its expenses at $2.3 billion to $2.6 billion from the Category 4 hurricane, which made landfall Sept. 28 in Lee and Charlotte counties and swept across the state.

But in a news release Tuesday, the insurer said its initial projection was based on one hurricane model. The new estimate used a second model, along with factoring actual claims data, litigation costs and inflation.

Citizens also said it is in the “early stages” of evaluating damages from Hurricane Nicole, which hit the East Coast last week before moving up the state as a tropical storm. But the news release said Nicole, which made landfall south of Vero Beach as a Category 1 storm, is not expected to have a major financial impact on Citizens.

“We will continue to update the market and other stakeholders as we gather additional information from actual losses,” Jennifer Montero, Citizens’ chief financial officer, said in a prepared statement.

Citizens has estimated it will receive 100,000 claims from Ian, which devastated some coastal areas of Southwest Florida. Spokesman Michael Peltier said Citizens had received 55,843 claims as of Tuesday morning.

Citizens expects that it will cover $2.4 billion of the costs from its surplus, which is essentially cash built up to prepare for paying claims. The other $1.4 billion will be covered through reinsurance, backup coverage that Citizens buys from private reinsurers and the state-run Florida Hurricane Catastrophe Fund.

While projections have varied, the overall insurance industry is expected to pay tens of billions of dollars in claims from Ian. As of Wednesday, the Florida Office of Insurance Regulation said it had received reports of $8.7 billion in estimated insured losses — a number that includes property claims, along with such things as auto-damage claims. The total is updated weekly.

Citizens, which was created as an insurer of last resort, has seen its number of policies more than double during the past two years as private insurers have dropped customers and, in some cases, gone insolvent because of financial problems. As of Friday, Citizens had grown to more than 1.12 million policies.

State leaders have long worried that a major hurricane or multiple hurricanes could force to Citizens to seek “assessments” to cover claims. Such assessments could lead to extra charges for policyholders across the state. But that does not appear likely with Ian claims, as Citizens cited its surplus and reinsurance coverage.

In addition to covering damage to homes, Ian also brought other costs for Citizens.

As an example, the Claims Committee of the Citizens Board of Governors on Thursday will consider a proposal that would authorize $136.3 million for adjusting services because of the storm.

The proposal said Citizens went through contracting processes in 2017 and 2018 that resulted in $343.9 million in contracts for adjusting services. As of Oct. 14, it had paid $247.5 million under those contracts and had $96.4 million remaining. But the proposal said Citizens officials are seeking approval of the additional $136.3 million to cover the Ian adjusting services and to make sure Citizens has money for other adjusting needs.

“The additional spend approval is requested to ensure that Citizens has sufficient contract spend for the Hurricane Ian response, while also retaining sufficient spend for adjusting services for other non-litigated claims as Citizens’ policies in force count continues to grow,” the proposal said.