As Hurricane Helene swept through Florida, it left behind widespread damage, with private insurance losses estimated at $6 billion, according to Gallagher Re. This storm is yet another reminder of Florida’s shaky property insurance market, where homeowners have been hit hard with rising premiums.
Between 2017 and 2022, insurance rates for Florida homeowners jumped by 45%, with the average annual premium now at $5,500 — more than double the national average of $2,285, as reported by Bankrate. In some cases, Floridians are facing annual premiums as high as $20,000, leading some to drop coverage altogether.
As climate change drives more extreme weather events, experts predict that homeowners in high-risk areas will see their insurance costs continue to rise. A recent study estimates that by 2053, people living in hurricane and wildfire-prone regions will pay an extra $700 each year in insurance premiums.
Florida is one of the states most likely to suffer economic losses due to climate change, according to research from major universities and the Federal Reserve. Currently, the state’s insurance industry is struggling, with many traditional insurers stepping back from offering policies, especially in areas prone to disasters. This has left newer companies and Citizens Property Insurance Corp., the state’s insurer of last resort, to fill the gap.
These insurers are also facing higher costs from reinsurance companies, which help cover the risk of catastrophic events like hurricanes. Florida’s dependence on the global reinsurance market makes it especially vulnerable to rising costs.
However, there may be some relief on the horizon. In late 2022, Governor Ron DeSantis signed a law aimed at reducing unnecessary lawsuits and cutting costs for insurers, which could slow the rate increases temporarily. But as climate change continues to worsen, it may be harder for insurers to remain financially stable, making it challenging to keep insurance affordable and accessible for Floridians in the long run.
