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Florida’s insurance crisis is getting worse

On Behalf of | Sep 15, 2023 | Insurance Law and Litigation

As Florida faces another hurricane season, the state finds itself in a worsening insurance crisis. Many insurance companies have stopped offering new policies in Florida. Some have canceled existing policies and left the state altogether.

By some estimates, about 100,000 Floridians are now trying to find homeowners insurance. Those homeowners who are still insured find their premiums going up rapidly. The average cost of homeowners insurance in Florida rose this year by 42% over last year to $6,000.

With this crisis comes a huge increase in insurance-related lawsuits. The Insurance Information Institute found that Florida generates only 9% of all homeowners insurance claims in the nation, but accounts for 79% of the nation’s homeowners insurance litigation.

What’s behind this crisis?

There are several factors driving this crisis. One is a quick population growth that has driven up the cost of living and contributed to Florida having the highest inflation rate in the nation. Costs of building materials have gone up particularly quickly, driving up the costs of repairing or rebuilding homes.

But the biggest factor is climate change.

Climate scientists have been warning for years that as the planet warms, it will create more powerful storms. At one time, this may have seemed like a scary prediction of events that might happen sometime in the future. Over the past 10 years, as Florida and other states have faced severe hurricanes and other natural disasters, this prediction no longer seems so theoretical, nor so far off in the future.

Insurance companies have taken note. As their payouts to policyholders have increased, they have seen a threat to their bottom lines. In addition to leaving Florida, insurance companies are also pulling out of California, which has faced a series of destructive wildfires in recent years.

What can you do about it?

On this blog, we recently discussed some things homeowners can do to protect their homes and try to keep their insurance policies. But even the most proactive and prepared homeowner can find themselves at the mercy of an insurance company after their home has been damaged by a major storm.

Insurance companies have a financial incentive to deny claims or pay less than a policyholder deserves. When this happens, homeowners need professional advice and representation.