Florida Faces Exodus as Residents Declare Insurance Crisis Final Straw [View all]
Source: Newsweek
Published Oct 30, 2024 at 5:00 AM EDT
Florida's home insurance crisis is becoming too dire for some residents who feel they may have no choice but to leave the state in the face of high premiums and hurricanes. Several residents have spoken to Newsweek about how with "no solutions" in sight to fix the problem, they will likely have to relocate.
The current home insurance crisis has been several years in the making, with several factors at play. Premiums have skyrocketed following numerous deadly hurricanes that have battered the state in recent memory. In 2022, Hurricane Ian caused a whopping $112 billion in damage, the costliest storm in Florida's history. Recent storms Helene and Milton, which arrived within a fortnight of one another, have already resulted in $1.4 billion and $2.4 billion in losses respectively.
As if the threat of destructive hurricanes wasn't enough, the industry has in recent years been dealing with litigation from roof-insurance scams, as well as reinsurance costs having risen sharply. Reinsurance serves as backup coverage for insurance companies, offering a financial safety net to cover large or multiple payouts after events like storms or natural disasters.
Higher costs and payouts for insurance companies mean higher premiums for consumers. According to virtual insurance company Insurify, Florida homeowners paid an average annual premium of $10,996 in 2023—the highest in the country. The exorbitant costs are forcing Florida homeowners to either self-insure or under-insure because "insurance costs are so high and insurance companies have been pulling out of the state," Florida-based expert broker and real estate advisor at Sotheby's International Realty, Jenna Stauffer, told Newsweek.
Read more: https://www.newsweek.com/florida-exodus-home-insurance-crisis-1976454
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