The Honest Broker: Hurricane Ian’s Effect on the Florida Insurance Market
BY: DIANE LOTT, BROKER
PARADISE FOUND REALTY
The damage wrought by Hurricane Ian may be the insurance industry’s breaking point in Florida. Hurricane Ian is expected to undermine the already precarious market for property insurance in Florida, supercharging premiums and exposing gaps in coverage. Long before the storm, Florida’s property insurance system was a mess. Hundreds of thousands of Florida homeowners lost their private insurance policies over the last two years, after a dozen companies left the market in the face of billion-dollar annual losses, including several that went under.
Hurricane Ian will test the financial preparedness of some insurers to cover losses to their portfolios, in particular smaller Florida carriers with high exposure concentrations in the impacted areas. Now, the damage wrought by Ian may be the industry’s breaking point in the state. More than a million Florida homeowners have been forced to turn to Citizens Property Insurance, the state’s publicly funded “insurer of last resort” — meaning that state taxpayers could be on the hook for billions of dollars’ worth of hurricane damage.
Early estimates say the storm caused at least $63 billion in damage to privately insured property alone, not including flood damage covered by the National Flood Insurance Program, which provides most flood policies.
Annual premiums already cost Florida homeowners $4,200 on average, triple the national average rate. In fact, most insurers increased their already high rates by 20-30% for 2022 renewed policies. Florida’s geography, which regularly puts it in the path of severe storms, contributes to its insurance woes. But its unusually high rates of litigation worsen the situation. A lawyer-friendly environment means that Florida sees 79% of the nation’s homeowners’ insurance lawsuits, but only 9% of all claims. The combination between the storms’ damage, fraud and litigation may be the downfall for homeowners to obtain insurance in the future.
Email: Diane@ParadiseFoundRealtyFl.com
Website: www.ParadiseFoundRealtyFl.com
Phone: 954-294-5060
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