Florida insurance woes just getting worse

Hurricane Ian's category 4 winds and hours-long deluge of rain did even more damage than the eye could see.

The storm was, by most accounts, the costliest to ever hit Florida and its wake left homeowners breathless at their new insurance rates as a dozen or more companies either left the state altogether or filed for insolvency.

With fewer companies to fill the void, thousands of homeowners have jumped to Citizens, Florida's statebacked insurer of last resort.

That phenomena, however, has swollen the company's roles to the point that the state wants to raise rates by 12% or more while urging potential customers to look elsewhere.

Meanwhile, lawmakers - and everyone else - are casting a weary eye on the next couple of months, hoping and praying there are no more Hurricane Ian's in the picture that might sink Florida's insurance market.

Florida's Legislature took a stab at heading off the problem before it got worse.

One of the state's efforts meant providing cover for insurance companies in lawsuits that many deemed frivolous as lawyers sought new roofs and repairs to homes that insurance companies claimed were not needed.

Lawmakers are pleading for patience to give the new laws a chance to make a difference. But homeowners hammered by high premiums on top of an expanded flood map that FEMA produced last year, are hurting.

"The Legislature waited until the house burned down before they pulled out the hoses," said Jim Nolan, head of Nolan Family Insurance in Punta Gorda.

Nolan has been in the insurance business for 35 years, taking over the company from his father who started as an All-State agency owner in 1974.

"There are not many options out there right now for homeowners," he said.

"So much has happened the past few years."

Nolan said insurers felt secure buying re-insurance coverage to cover potential losses in years past and those rates were "lower than they should have been." Now, companies are paying much higher rates to insure their losses and it's taken a toll.

Citizens has doubled its number of clients in just two years and lawmakers and insurance people alike know that is not good. But because of the lack of options and the lower rates Citizens offers, there has been a flood of homeowners eager to sign with the company.

But Citizens is not a savior to many homeowners. Right now Citizens will not insure a home worth more than $700,000. With construction costs rising, the company has set that ceiling on homes it's willing to cover, Nolan said.

That forces a good number of homeowners to seek out insurers that are asking top dollar for premiums.

Think about Punta Gorda Isles as an example. It would be difficult, at today's soaring real estate values, to find a home there that can be rebuilt for less than $700,000.

One idea being floated that could help is to increase the state's cap fund - money reserved to cover losses when hurricanes hit and state insurers run out of money to pay for repairs and replacements.

That would almost act as the state having its own re-insurance pool. The money could come from millions of dollars in reserve the state has or possibly even from federal funds sent to aid hurricane recovery.

State Rep. Michael Grant, R-Charlotte County, said there are no "easy or cheap answers."

He pointed out that disasters like the wildfire on Maui impact re-insurance rates for everyone and that only pushes homeowners' costs higher.

The best solution we all can agree on is for a hurricane-free season the next two months. That would give insurers some breathing room and a year to replenish their funds without a huge outlay.

Charlotte County Sun