Florida's insurers say they can manage

TALLAHASSEE, Fla. – With the worst hurricane season on record already forecasted, Floridians may be stunned to learn that there's some good news also hovering over this summer.

The state's property insurance companies are on solid footing, industry experts say. A hurricane hit – or, maybe, even two – should be manageable, experts say.

"The insurance market is much stronger than we've seen in recent years," said Mark Friedlander, a spokesman for the Insurance Information Institute, a research organization funded by the insurance industry.

A combination of only one hurricane strike last year, a handful of new insurance companies entering Florida enhancing competition, and a slight downward trend in rates sought by insurers are signs of life in a once-staggering market heading into the beginning of the six-month hurricane season.

Florida insurance

premiums still sky high

Floridians continue to pay some of the highest property insurance premiums in the nation, about $6,000-a-year on average. Those in South Florida counties are shouldering closer to an average $11,000, industry analysis shows.

Florida's $6,000 property insurance average is 42% more than it was in 2022 and triple what it was when Gov.Ron DeSantis took office in 2019.

Nationally, homeowners paid an average $1,700 last year, according to several estimates. In addition, six of the top 10 costliest insurance cities in the nation are in South Florida.

But there are some bright spots.

The state's Office of Insurance Regulation has said that nine companies have proposed reducing rates next year, while another 10 have submitted plans for no rate increases.

"We should be seeing homeowners' premiums leveling off a little bit more, probably not coming down significantly, given the nature of the risk of storms," said Patricia Born, a Florida State University professor of insurance and risk.

"But I do see some light at the end of the tunnel ... there's a lot of people trying to save the insurance market in Florida," she added.

Still, elevated home values, higher prices for fuel, labor and construction, along with supply chain problems are likely to keep the cost of insurance high.

Lawmakers have enacted industry-friendly changes

For their part, Florida lawmakers have been trying to prop up property insurers, having enacted six significant industry-friendly measures since 2019.

In 2022, before and after Hurricane Ian devastated Southwest Florida, the Legislature called two special sessions. They added new limits on lawsuits against insurers and steered $3billion in taxpayer money into a new reinsurance pool for companies.

That fund, though, has only been occasionally drawn on by insurers. (Reinsurance, simply put, is insurance for insurance companies.) Cheaper, private reinsurance dollars are still readily available.

This year, lawmakers also poured another $200million into the My Safe Florida Home program, which enables homeowners to get $10,000 state matching grants when they add features hardening their houses against storms.

Hurricane Idalia, a Category 3 storm that walloped Florida's Big Bend last August, was the lone hurricane to hit the U.S. mainland last year.

Its $3.5billion in insured losses was considered relatively modest.

Florida has struggled to maintain stable industry since Andrew

Florida has struggled to maintain a stable insurance industry for more than 30 years, since Hurricane Andrew destroyed Homestead.

But this season, the National Oceanic and Atmospheric Administration is predicting between eight and 13 hurricanes, the most ever forecast – including four to seven hurricanes with winds of at least Category 3, or 115 mph.

An improving insurance market could help ease the anxiety of property owners and insurers. The steady "depopulation" of the state-backed Citizens Property Insurance Corp. shows Florida's market is getting better, many experts say.

With new companies in the mix, Citizens has shed more than 200,000 policies since last September. With some prodding from Citizens, customers have moved into private market coverage – sometimes at a higher cost – bringing the insurer down to just under 1.2million clients.

"Although the cost of insurance has been going up, people have been able to get coverage in Florida," said FSU's Born. "From a social point of view, it's good to see that we don't have a huge gap of uninsured heading into hurricane season."

But she cautioned that it's still a numbers game with storms.

Scientists cite climate change as contributing to severe storms

"I'm pretty optimistic that one storm isn't going to kill us," Born added. "A couple of storms may be a little bit more of an issue."

While most scientists cite climate change as contributing to warmer seas and more violent storms, DeSantis in mid-May signed legislation that erases references to climate change from state law and ends state grant programs encouraging energy efficiency and conservation.

The move reflects an anti-climate change view which polls show is dominant among Republican voters, particularly older voters. Presumptive GOP presidential nominee Donald Trump has labeled climate change a "hoax."

With Florida's stiff-arming of climate change now in place, it's not surprising that the state continues to build and rebuild in areas prone to storms and flooding.

"It's worth thinking of the market failure created by over-incentivizing development in what are uninsurable areas," said Erin Ryan, associate dean of environmental programs at the Florida State University College of Law.

"We end up in the uncomfortable place of trying to help people living in flood or hurricane-prone areas, which is most our state, but also wrestling with the policy implications of subsidizing risk through insurance and statewide programs," she added.

Friedlander, of the Insurance Information Institute, said Florida is not alone.

"More people are living in harm's way than ever before," Friedlander said. "People want to live near the coast, despite the risk of hurricanes. Texas and Florida are two of the fastest growing states, and Texas has every kind of peril you can think of."