Unaffordable Or Unavailable - Your Choice: "The Florida Insurance Market Has Been Broken For A Long Time"

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Florida and other high-risk coastal states have the highest rates of non-renewals, data prepared by the U.S. Senate Budget Committee show. However, there are signs that the trend — while not as pronounced — is spreading inland to Iowa, Oklahoma, and other states. “People always question: Is insurance going to break?” said Benjamin Keys, a Wharton School economist who has written extensively about the impacts of climate change on real estate. “Well, it already broke a long time ago. Private insurers don’t want to write in the riskiest areas. The Florida insurance market has been broken for a long time.”

In 1992, after Hurricane Andrew caused billions in damage in southern Florida, and several companies collapsed or stopped writing policies, the state created Citizens Property Insurance Corporation to act as an insurer of last resort. Although never intended to compete with private companies, Citizens has since grown to become one of the largest insurers in Florida, with as many as 1.4 million policies at one point. Concerned about its growing financial exposure in the wake of Ian, Citizens began “depopulating” its rolls and transferring policies back to newer, smaller private insurers that have entered the chaotic Florida market.

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Keys and other analysts estimate that the average cost of a homeowner’s policy nationally has risen between 30 to 40 percent in the last five years — more in high-risk states such as Florida, where there are few regulatory caps and the average premium increased by $1,450 between 2020-2023. Overall, Florida is the most expensive state for homeowner’s insurance, with rates up to four times the national average and painfully high deductibles costing homeowner’s thousands of dollars more. The risks associated with our hotter, wetter world are growing as natural disasters become more damaging. Ten of the 20 largest wildfires in California have occurred in the last five years, including the devastating 2025 L.A. fires, while hurricane damages and flood losses have soared to all-time highs.

Since 2000, Florida has had 36 presidential disaster declarations, with damages from just the last seven years exceeding $300 billion, according to the National Oceanic and Atmospheric Administration. Florida, Louisiana, and Texas alone account for about two-thirds of all hurricane and flood losses. For example, between 1979-2003, Florida homeowners filed $1.52 billion in flood claims, data show. Then, in 2004, four large hurricanes struck the state, followed by a string of other storms and floods, including Ian and five other major hurricanes. Flood claims have since swelled to $18.9 billion. Most are in coastal counties along the Gulf of Mexico, including Lee County, home to Sanibel Island.

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https://e360.yale.edu/features/climate-change-home-insurance