Across Florida, homeowners are grappling with exorbitant insurance policies, exacerbating the trust issues caused by carriers mishandling claims related to Hurricane Ian damage[^1^]. As a result, customers are exploring various methods to cope with these costs. Some are reducing coverage, while others are opting to go without insurance entirely, a risky move known as “going bare.” In a more drastic measure, certain individuals are even leaving the state in search of cheaper, less disaster-prone areas[^1^].
Escalating Insurance Premiums in Florida
Homeowners in Florida already pay over four times the national average for home insurance[^2^]. In the past year alone, the average cost of homeowners insurance increased by more than 40%[^2^]. According to a recent survey conducted by real estate brokerage firm RedFin, three out of four Florida homeowners experienced an increase in their insurance premiums, and one in eight had their policies dropped by their carriers[^2^].
Driving Residents Out of Florida
The high insurance prices are driving many residents out of Florida as they seek more affordable housing and better financial prospects. One-third of those who lost coverage have already moved or plan to move as a direct result[^3^]. A significant number of seniors are heading to “mid-South states” such as the Carolinas, attracted by factors such as lower income tax rates, reduced exposure to extreme weather, and lower housing and insurance costs[^3^]. In fact, AARP Florida Director Jeff Johnson anticipates future census releases will reveal as many older Floridians leaving the state as there are newcomers, as they are lured away by financial considerations[^3^].
Risky Measures to Cut Costs
To alleviate the burden of soaring premiums, some homeowners are resorting to risky measures such as dropping wind coverage from their insurance policies[^4^]. Although this reduces the annual cost, it leaves them vulnerable should a hurricane strike their homes[^4^]. Despite the potential risks, many homeowners believe the financial savings are worth the gamble[^4^].
Renters Affected by High Insurance Costs
The impact of high insurance costs extends beyond homeowners and affects renters as well. In Lee County, which suffered extensive damage from Hurricane Ian, housing costs skyrocketed when over 20,000 structures were destroyed or severely damaged[^5^]. As a result, thousands of residents sought rental units while waiting for their homes to be repaired[^5^]. However, rental prices remain significantly higher than the national average, and households earning less than $87,000 are considered rent-burdened[^5^]. Costly property insurance is a major factor contributing to the high rents in storm-vulnerable areas of Florida[^5^].
Legislative Response and Industry Mismanagement
Despite the challenges faced by Floridians, the GOP-led legislature has tightened regulations, making it increasingly difficult for customers to sue their insurance carriers[^6^]. The rationale behind these measures is that frivolous lawsuits against carriers have artificially inflated insurance costs in the state[^6^]. However, an analysis conducted by the Office of Insurance Regulation found that claimant lawsuits often arose after carriers delayed payment to policyholders[^6^]. Some argue that Florida’s insurance market is not adequately regulated, and blame mismanagement within insurance companies for the high premiums. They claim that these companies do not hold enough cash reserves to fulfill claims, causing them to fold when hurricane seasons devastate policyholders[^6^].
FAQs
How much are insurance premiums increasing in Florida?
Florida homeowners currently pay more than four times the national average for home insurance, with premiums increasing by over 40% in the past year alone[^2^].
Are residents leaving Florida due to high insurance costs?
Yes, one-third of residents who have lost coverage are either planning to move or have already relocated to more affordable areas, such as mid-South states like the Carolinas[^3^].
What risks do homeowners face if they drop wind coverage from their insurance policies?
By dropping wind coverage, homeowners reduce their insurance costs but leave themselves vulnerable to potential hurricane damage without coverage[^4^].
How are renters affected by high insurance costs?
Renters in storm-affected areas of Florida, such as Lee County, face significantly higher rental costs due to costly property insurance. This pushes many renters out of the market or forces seniors back into the workforce to afford housing[^5^].
What measures have been taken to address rising insurance costs?
The legislature has tightened regulations to limit customer lawsuits against insurance carriers, claiming that these lawsuits drive up insurance costs. However, critics argue that mismanagement within insurance companies and inadequate cash reserves are the real culprits behind high premiums[^6^].
Conclusion
The skyrocketing costs of homeowners insurance in Florida are putting a strain on residents. Many are making tough decisions, including reducing coverage or going without insurance altogether. Additionally, high insurance costs are driving people to leave the state in search of more affordable options. Renters are also feeling the impact, with elevated rental prices due to the expensive property insurance in storm-vulnerable areas. While the legislature has taken steps to address the issue, some argue that further regulation is necessary to ensure fair and affordable insurance for all Floridians.
For more information, contact Kate Cimini, the Florida Investigative Reporter for the USA TODAY-Network Florida, at 239-207-9369 or kcimini@news-press.com[^7^].
Image source: Priscilla O
Image source: Maurice Gutierrez
Image source: Fort Myers Beach after Hurricane Ian
[^1^]: Source: Move, cut back or go bare: Florida seniors juggle skyrocketing costs, impossible choices
[^2^]: Source: RedFin survey on rising insurance premiums
[^3^]: Source: AARP Florida Director Jeff Johnson’s statement on residents leaving Florida
[^4^]: Source: Homeowners’ decisions to drop wind coverage
[^5^]: Source: Impact of high insurance costs on renters in Lee County
[^6^]: Source: Legislative response and industry mismanagement
[^7^]: Source: Kate Cimini Email
