Florida’s home insurance crisis has become too dire for some residents, who feel they have no choice but to leave the state in the face of high insurance premiums and hurricanes. Several residents told Newsweek they would likely have to relocate because “there is no solution in sight” to fix the problem.
The current home insurance crisis has been occurring for several years and is a combination of several factors. Insurance premiums have skyrocketed in the wake of a number of deadly hurricanes that recently hit the state. In 2022, Hurricane Ian caused $112 billion in damage, making it the costliest storm in Florida history. Recent storms Helen and Milton hit within two weeks of each other and have already caused losses of $1.4 billion and $2.4 billion, respectively.
As if the threat of devastating hurricanes wasn’t enough, the industry has also grappled with lawsuits over roof insurance fraud and skyrocketing reinsurance costs in recent years. Reinsurance acts as backup coverage for insurance companies, providing a financial safety net that covers large or multiple payouts after events such as storms or natural disasters.
Higher costs and payments for insurance companies mean higher premiums for consumers. Florida homeowners paid an average of $10,996 in annual insurance premiums in 2023, the highest in the nation, according to virtual insurance company Insurify.
Jenna, a Florida-based professional broker and real estate advisor with Sotheby’s International Realty, said homeowners in Florida are paying exorbitant prices because “premiums are so high and insurance companies are leaving the state.” He said the cost has forced him to self-insure or be underinsured. Stauffer told Barron’s.
It is reported that 1 in 5 seniors are planning to move.
“Something scary is happening in the Sunshine State. One in five seniors I talk to are planning to move or are at least exploring their options,” says Active Mutual founder. CEO Alex Schlesinger told Newsweek. “These are desperate people who are seeing their bond income disappear at astronomical costs.”
Composite image created by Newsweek. Florida residents have some of the highest home insurance rates in the country. Composite image created by Newsweek. Florida residents have some of the highest home insurance rates in the country. Photo illustration: Newsweek/Getty
Some homeowners who were unable to find insurance on the private market turned to the state insurance company, Citizens Property Insurance Corp., as a last resort, but it has taken out policies in record numbers. As a result, they are now being pulled back into the private market.
With few affordable options left, many Floridians told Newsweek they’re considering leaving altogether, and some have already done so.
“I don’t see a solution.”
Currently, state residents have the lion’s share of homeownership policy in the state. Established by the Florida Legislature in 2002 to provide insurance to eligible Florida property owners who cannot find insurance on the private market. At the end of September 2024, Citizens had 1,263,055 policies in force, a significant increase compared to 421,332 policies in force in the same period five years ago in September 2019. did.
To ease the burden, the state’s insurers have begun “depopulation,” offering customers alternative coverage with private insurers as long as the cost does not exceed 20 percent of their current coverage costs. This comes after Florida regulators approved eight new property and casualty insurance companies to do business in Florida in an effort to promote market stability.
In June, Citizens’ board of directors unanimously supported raising interest rates by 14% to bring them closer to rates offered by private insurers, in hopes of encouraging more policyholders to leave Citizens.
These rising costs are causing residents to consider moving elsewhere. Ron Velshi, a retiree, bought a home in St. Augustine earlier this year, and after his insurance broker shopped around for insurance for his new home, he found Citizen was his only coverage option.
Just a few months later, he was told that if the carrier’s quote was less than 20 percent of what he was currently paying Citizen, they would remove him from Citizen and move him to another provider, which left him “caught in the middle.” It became,” he said. place. “He said the move would not take place until May 2025, but the prospect could force difficult decisions.
“My wife and I moved to Florida from Maine 20 years ago and are now both retired and on fixed incomes,” he told Newsweek. “Although the amount we currently pay for homeowners insurance is within our budget, the cost of homeowners insurance has increased significantly and with no solution in sight to fix the problem, we face the possibility of having to buy insurance — not a smart option — or move to another state.”
“I don’t know if I’ll be sad when I have to go.”
Havana-based Henry Williams, who is also facing depopulation from the nation and lives on a fixed retirement income, said in the face of rising insurance premiums that he was “building wealth by owning a home.” “That American dream, at least in modern times, is dead,” he told Newsweek. Me in Florida. ”
“What my husband and I have worked hard for for a long time could be wiped out in a single storm, or with every infusion due to rising insurance premiums,” he said. Ta. “I’m in a tough spot. I can’t leave, and I can’t stay.”
“Until recently, there was so much I loved about living in Florida. I wouldn’t be sad if I had to go.”
Even those who only spend part of their time in Florida are giving up. Canadian Frank Fulton and his wife bought a home in West Palm Beach in 2019 and have spent their summers there.
“We didn’t have any insurance on the house other than liability coverage,” he told Newsweek magazine. “I contacted my insurance agent every year, and each time I was told that I would not be able to get a new insurance quote from any insurance company. I did not contact Citizens. During the summer and fall I spent my time watching the Florida weather and worrying that our place would be wiped out by the next hurricane.”
As a result of my struggle to find insurance, it was sold and I also lost 10% of my original purchase.
Phil Jones, a broker with Orange Park-based Your Choice Real Estate, has witnessed this type of scenario firsthand. He said Florida is “on the edge of a cliff right now, and we’ve seen homeowners forced to sell and buyers unable to purchase their homes because of this issue.”
