Once broken, now rebuilding

As the scenario of a higher-than-average hurricane season is again upon us, the property insurance scenarios for homeowners and business owners in Florida are definitely getting better, insurance experts say. Some even say the industry has recovered. If so, that's saying quite a lot.

This follows several years of devastating storms making various areas of the state look like a bomb went off, insurers leaving the state in droves or going insolvent and thousands of homeowners and business owners seeing their policies suddenly canceled. Those that were lucky enough to find a new insurance carrier paid steep new premiums for the same or even less coverage, and then saw increases spike again the next year.

Emerging out of the morass of the insurance crisis is more manageability, even stability.

Mark Friedlander, a spokesman for the industry association's Insurance Information Institute, said rates are flat or even lowered across the state in some cases.

"So we are definitely heading in the right direction," Friedlander said. "Florida's market is stabilized, even with three landfalling hurricanes in Florida last year, Debby, Helene and Milton."

The Florida Office of Insurance Regulation, which has primary responsibility for regulation, compliance and enforcement of laws related to the insurance business and monitors statewide industry markets, bears that out.

In January 2025, reports to the governor and legislature said the market continues to show overall stabilization in the wake of recent legislative reforms in 2022 and 2023.

These reforms "enhanced protections for consumers, strengthened Citizens Property Insurance Corporation, and encouraged investment by insurers and reinsurers by providing clarity to the market and the risk they underwrite," the report states. "Rate filings for 2024 show a slight downward trend for the first time in years, indicating stabilization of the property insurance market. Thirty-two companies have filed a zero percent increase and at least 17 companies have filed a rate decrease to take effect in 2024."

"I would say as a general rule, we are seeing some moderation in rates," said Bob Rollins, president of The Beacon Group Inc. in Boca Raton.

It depends on the age and construction of the home, said Rollins, who is also the immediate past chair of the board of directors of the Florida Association of Insurance Agents. "We still have homes built in the '50s and '60s with the same tile roofs," he said. "Whether you have wind mitigation is also a factor in lowering costs. There's more and more emphasis on windstorm mitigation than ever before."

"I think some of these changes the Legislature has done in the last couple of years have helped tremendously," Rollins said.

Brian Chapman, president and CEO of Chapman Insurance Group, based in Cape Coral, goes beyond cautious optimism in his assessment of the insurance scenario. Chapman, who has several offices throughout Southwest

Florida, has about 30,000 clients, 80% of them in the Lee, Collier and Charlotte County area. He is also licensed all throughout Florida and in 13 other states as well.

"We are beyond any of that talk," said Chapman. "We have recovered. And I would say that unequivocally. There's no bashful shyness about this, like, maybe we have, maybe we haven't. No, we recovered six months ago. And the last six months has been an absolute downward trend."

In Southwest Florida specifically, he's seeing probably 15% to 20% less in insurance rates, on average, year over year, he said.

The state's Office of Insurance Regulation also says 10 new companies have been approved to write homeowners policies in Florida since the reforms.

New insurance companies entering the market means more competition and offers great opportunities for people who want to find better coverage for a lower cost, Chapman said.

But first, you have to know what kind of coverage you need.

The Insurance Information Institute suggests you do an insurance check-up with your agent to make sure you have the right types and amounts of insurance coverage so you are financially protected for hurricane season. That means both property insurance and flood insurance are two separate policies.

"Many homeowners are confused about that," Friedlander said. "They think they have a robust policy for property insurance, but it doesn't include flood. They don't know that until it's too late."

"In a state like Florida, you have windstorm coverage and you have a windstorm deductible," Friedlander said. "That means for hurricanes. So you figure, 'I have hurricane insurance.' Well, yes and no. You have insurance for the windstorm component. You don't have coverage for the flood component. Totally separate."

Sometimes homeowners don't purchase the windstorm component to try to save money, Friedlander said. Typically, that could only be done if you don't have a mortgage. Otherwise, your mortgage lender will require you to have a policy that includes windstorm coverage to protect their asset.

In addition, a mortgage lender may require a homeowner to have flood insurance, depending on where they live, Friedlander said. If the Federal Emergency Management Agency has designated your location as a high-risk flood zone, you will definitely have to have it.

In a standard home policy, you have a declarations page and it lists all of your coverage limits right up front in the policy, Friedlander said. It tells you your deductibles and tells you how to file a claim. But the important area to look at is the dwelling replacement cost because that is the replacement cost value of your home — how much will it cost in labor and materials to rebuild or repair your home. "We're not talking about your real estate value, what Zillow says — that's not the same thing," Friedlander said.

Chapman said it doesn't matter how much you paid for your house. All his company cares about is what it would cost to replace it. "We don't care about the land, the seawall and all the improvements on the landscaping," he said. "We can't insure land and location. We insure rebuild and reconstruction."

Someone may have paid $2 million for a house and demand that it be insured for $2 million, but when his company runs the numbers through a replacement cost estimator and the cost to replace it is $1.2 million, that is what it will be insured for, Chapman said. "And the lender will sometimes argue, we want $2 million because our loan's $2 million. And it's like, sorry, that's not the way this works."

Ideally, the insurance checkup should be done before hurricane season, Friedlander said. Flood insurance typically will require a waiting period of 30 days before it kicks in. And once a hurricane is on the way and a storm warning is issued, you can't buy or change insurance policies, he said. You can't call your agent and say you want to add extra coverage now for your home. "Nobody will write new policies until the storm has passed," he said.

In Florida, only about 20% of homeowners have flood insurance, Friedlander said. Nationally, only 6% of homeowners have flood policies. Almost half the flood policies in the U.S. are written in Florida, he said.

Chapman said most consumers are seeing their flood insurance increase by about 15 to 18%, mostly due to the implementation of FEMA's new 2.0 risk rating system. According to FEMA, the system "allows the agency to calculate premiums across all policyholders based on the value of their home and individual property's flood risk."

Chapman said that if you are in a flood zone that is not designated as a special flood hazard area by FEMA, then flood insurance would typically not be lender required. It would be optional.

The Insurance Information Institute believes all Floridians should have flood insurance. "Especially in a coastal county, to us it's a must-have," Friedlander said.

Flood insurance covers storm surge, but it also covers any kind of flooding, not just from hurricanes, he said. That means overflowing rivers, torrential rains that flood an entire community, etc. "Any type of flooding from the ground up is covered by a flood insurance policy."

Being inland is no guarantee you won't be flooded, Friedlander said. There was severe flooding in Central Florida in both the 2022 and 2024 hurricane seasons, he said. "We know (Hurricane) Helene particularly had record-level storm surge in areas that never saw storm surge," he said.

In April, Fort Lauderdale marked the second anniversary of catastrophic flooding that saw more than 2 feet of rain fall in just a few hours, he said.

Florida also has dozens of companies that can write private flood insurance for sometimes better rates and higher coverage limits, he said. Private policies also include coverage for additional living expenses, in case you can't live in your home after a storm. National flood insurance policies don't cover it, he said.

Tim Mitchell, owner of TOPCAT Property Restoration, has a different view of the insurance scenario — at the ground level, where he has been working for years with hundreds of customers after hurricanes damaged their homes.

"What I see on the ground out there is that people don't have enough insurance, and no insurance wants to pay them," he said. "People don't have enough coverage. I see that all the time and see them having to fight for what they have."

"There are some really good insurance companies out there," he said. "Some that aren't." Mitchell said he works with the same kind of software that adjusters have. When he writes an accurate estimate, he gets "beat up" by adjusters who fight to lower the estimate, he said. Eventually, they work out an agreement, Mitchell said.

"You have to have all your ducks in a row," he said of consumers. "Document everything with pictures."

Friedlander said you should have a home inventory with photos and a list of everything you own, with documentation of the original retail values if possible. "If you have to file a claim, the claim process will go much more smoothly," he said.

Business insurance coverage is similar to homeowner's coverage, Friedlander said. It covers commercial property, assets inside the property, general liability, "what are typically standard loss events, which are natural disasters, fire and theft," he said.

Flood insurance is not usually an option for businesses unless the business has a loan, because the loan agreement may require it, he said. "So I guess it really depends on how their financial situation is structured."

Chapman said building coverage works very much like home insurance. "In some ways, almost exactly like it, in some ways just slight variations to it. It all comes down to what's occupying the building."

Building use matters, he said. "If you have a fireworks store, it's obviously different than if you have a professional office." Whether or not you have tenants also matters.

One of the most important coverages is business income coverage, Chapman said. Say you own a building and you lease to multiple tenants, like a strip center. If something happened to that building and it had to be renovated or reconstructed, you would potentially lose your income because you could no longer collect rent. That falls under business income coverage.

This also applies to most other business owners, such as professional offices, accountants, restaurants, florists, chiropractors, etc. If you took a loss to your building or the building that your business is in, it may disrupt your business income. This coverage allows you to still pay your employees while the business is closed and helps you get it back up and running quicker, Chapman said.

Say the damage was so bad it forced you to relocate the business for a time. That's where business interruption coverage kicks in, Chapman said. It allows you to find a new place, put a lease together, and carry another electric and water bill, he said.

You want to have both business income and business interruption coverage, Chapman said. They are two coverages that work in parallel together, but in covering different things, he said.

The overall insurance scenario is also brighter because it can now be more competitive, Friedlander said. Insurers can also sell insurance at lower rates because they have far fewer lawsuits, due to legislative reform, he said. Reinsurance, which is purchased by insurers as a backup to spread out their risk and help pay their claims, has also stabilized, he said. Reinsurance is about 40% of the cost of your insurance bill, he said.

"Obviously, there are individual situations or locations where the situation is not as bright, and certainly the areas along some of the coastal areas that have gotten a lot of hurricane activity over the past few years probably aren't seeing as positive a situation as the statewide scenario," Friedlander said. "So we just want to be realistic about it."

However, Chapman said if consumers do see their premiums go down and decide they'll be satisfied with just that, they are really missing an opportunity. "The reality is people willing to take the time probably have the ability to get significant savings and improve their coverage," he said. "It's reset time."

"It's the first time in five or six years insurance has a significantly positive story to tell," Chapman said. "I hope people listen and take action." ¦