Florida’s insurance crisis requires new solutions | Opinion

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Florida’s insurance crisis requires new solutions | Opinion

Florida’s homeowner insurance marketplace has collapsed — and that was before Hurricane Ian. In 2022, seven Florida homeowner insurance companies went into insolvency or withdrew from the state, with twelve property and casualty companies overall in receivership.

Prior insurance cycles in the wake of catastrophic hurricanes show that Florida homeowner and property insurance premiums will rise another 25%-50%, or more, in the coming year without a restructuring of the marketplace. These costs are unsustainable for homeowners, condominium associations and businesses, who paid premium increases of up to 50% in the past year (many coastal properties saw 100% increases). In many cases, insurance will become unavailable.

Florida’s response to insuring the risk of hurricanes when the private market fails was to create the state owned, not-for-profit Citizens Property Insurance Corporation, which provides lower cost homeowners, property and hurricane insurance. Citizens’ current policy count is 1,047,000, more than doubling in the past year as Floridians flocked to Citizens after insurer insolvencies and rate hikes. Hurricane Ian will push Citizens policy count toward 2 million, an unsustainable risk for the state.

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