Ashley Webster of FOX Business reports rising home insurance costs for residents of southern states like Florida and Louisiana due to devastating storms.
When Hurricane Ian hit Southwest Florida last September, the state’s insurance industry was already at breaking point. Ian caused the second largest insured loss in history with damages estimated between $50 billion and $65 billion; only Hurricane Katrina in 2005 caused more destruction.
Now Florida Governor Ron DeSantis is doing his best to attract more individuals insurance companies to his state, to fill a gaping hole in the policies available to homeowners who are running out of options.
More than half a dozen private insurers have already been declared insolvent in the past year, another half dozen are faltering, and others have just thrown in the towel and left the state. The trend also reflects what is happening in Louisiana. Over the past two years, more than 20 companies have gone bankrupt or withdrawn from the state, forcing hundreds of thousands of families to pay higher premiums or go without cover.
“We are definitely in crisis,” Louisiana Insurance Commissioner Jim Donelon said.
A house burns on Sanibel Island, Florida, in the aftermath of Hurricane Ian, September 29, 2022. (Wilfredo Lee/AP Newsroom)
For Floridians, it is becoming increasingly difficult to find affordable homeowners insurance, and they are often forced to sign up with the state-backed insurer of last resort called Citizens Property Insurance Corp., with policies up to $6,000 per year. t include flood protection.
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“It’s still an issue and then the cost goes up because it’s not just the $5,000 it’s costing me; In a non-flood area I need flood insurance, in case of a flood, it’s still $750, it’s almost $6,000,” George Kyritsopoulos, a resident of Jupiter, Florida, told FOX Business.
DeSantis regularly cites one of the state’s biggest insurance problems — lawsuits. Florida accounts for only 9% of claims in the United States, but 79% of all home insurance lawsuits. The state legislature is trying to stabilize the insurance market and has passed several bills aimed at stopping the proliferation of litigation.
Rep. Bob Rommel is hugged by Rep. Josie Tomkow after the property insurance bill he co-sponsored passed at the State House in Tallahassee, Florida on Dec. 14, 2022. (Phil Sears) (AP Newsroom)
A new settlement ends so-called one-way attorney fees that required insurance companies to pay plaintiffs if they lost a lawsuit, but not the other way around. Another key change targets fraudulent roof claims that are made possible when homeowners assign their “assignment of benefits” to an unscrupulous contractor who will sue for repairs that don’t exist. This loophole is now closed.
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But even insurers that stayed in Florida have made their eligibility requirements stricter and, in some cases, dropped policyholders who don’t meet the highest standards.
Clouds reflect on a flooded street in the Orlovista neighborhood of Orlando, Florida in the aftermath of Hurricane Ian on October 1, 2022. (Bryan R. Smith/AFP via /Getty Images)
Clean Florida insurance program now has more than one million customers. In some parts of the state it is the only game in town and therefore, an estimated 12% of Floridians have no home insurance.
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Another hurricane season begins in five months and with Florida attracts hundreds of new residents Every day, a chronic lack of affordable home insurance could spell crippling financial disaster if another monstrous storm hits the Sunshine State.
Rebekah Castor of FOX Business contributed to this report.