This week marks the 20th anniversary of Hurricane Andrew, which made landfall Aug. 24 as a Category 5 storm in Elliott Key and Homestead, Fla.

At $15.5 billion in insured losses, Andrew was the costliest storm in U.S. history at the time. Catastrophe modelers with Karen Clark and Co. estimate that a similar storm making landfall today would incur more than $50 billion in insured losses.

For all of our sakes, one hopes that thesis won’t be put to the test this coming week.  The National Hurricane Center is now tracking the path of Tropical Storm Isaac, which formed as a low pressure cell off the coast of Cape Verde about a week ago. Though still a relatively small storm — with maximum sustained winds of 45 miles per hour and tropical storm force winds that extend outward about 45 miles — the NHC expects Isaac to strengthen into a hurricane with a projected path that could see it make a South Florida landfall early next week.

Currently, tropical storm warnings are in effect for Martinique, Dominica, Guadeloupe, St. Martin/St. Maarten, Saint Kitts and Nevis, Antigua and Barbuda, Montserrat, Anguilla, the British and U.S. Virgin Islands and Puerto Rico. Puerto Rico, the Virgin Islands and the south coast of the Dominican Republic also face a hurricane watch, while a tropical storm watch is in effect for the north coast of the Dominican Republic.

Because it’s still very early and there’s a great deal of uncertainty about both the degree to which the storm will strengthen and the track it might take, the probabilities associated with a strike by Isaac remain quite low.  At this point, the NHC projects the odds of the storm making landfall in the next five days as a hurricane are currently 3% in Marathon, with a 2% chance of a hurricane landfall in Key West and 1% odds in Marco Island. The odds of Isaac striking those three spots as a tropical storm are currently 22%, 20% and 18%, respectively.

NHC projections of tropical storm winds from Isaac hitting other locations in Florida over the next five days include 22% in Miami; 17% in West Palm Beach; 15% in Fort Myers; 14% in Fort Pierce; 13% in Venice, Cocoa Beach and Patrick; and 10% in Tampa and Orlando.

Obviously, the first and most important concern when it comes to any natural catastrophe is guarding against loss of life, followed in this case, by the tremendous destruction a landfalling hurricane could wreak on the lives and livelihoods of those in its path.

But because of the steadfast refusal of Florida lawmakers to confront the enormous systemic problems in the state’s insurance system — which include suppressed rates across the board and a tremendous concentration of risk within a state-run property insurer and reinsurer — we must grapple with another concern as well: the complete and utter insolvency of the State of Florida.

It is, of course, premature to say that Isaac would cause such a thing, even if does make landfall.  Under current projections , the odds that Isaac will be a Category 1 storm on Monday, when it would potentially be approaching Florida, are 22%. There is a 6% chance it will be a Category 2 and just a 1% chance it will be a Category 3, with negligible probability that it would be any stronger than that.

But remember that even a 1-in-25 year storm is likely to generate assessments for the Florida Hurricane Catastrophe Fund and deplete the cash resources of Citizens Property Insurance Corp. According to actuarial consultants Milliman Inc. , a 1-in-100 year storm would cause $79 billion in insured losses and $160 billion in total economic losses. It also would likely cause significant insolvencies of the many small, single-state insurers that comprise much of Florida’s property insurance capacity, which would leave Citizens, the Cat Fund and the Florida Insurance Guaranty Association to raise tens of billions of dollars in post-event taxes to pay all of their claims.

Isaac may not be the storm to do that. One hopes it won’t be. But given the laws of probabilities, it is a certainty that some storm, some day, will do exactly that. All we can hope is that Florida’s lawmakers – and its citizens – wake up to that reality before it’s too late.

Featured Publications