What happens when your home insurer drops you? Doom.

In April I received a letter of non-renewal from my home insurer, Centauri.

As the younger generation has taken to saying, "if you know, you know." That is, if you live outside Florida, you might not realize the existential threat these dreaded letters have come to represent for homeowners in 2022. But if you're like the 21 million residents of the third-largest state in the country, you're quickly learning.

In past years, when your policy was cancelled, it was a headache – calling your insurance agent (What's her name again? Did I save her info in my phone, or email?) and working to find a policy through another insurance company.

They might require new inspections (costly), repairs (time-consuming), or detailed historical information (annoying). Agents call this "remarketing."

But to remarket a policyholder, there must be a market. Today, that market is shrinking rapidly. For people like me, it has evaporated entirely.

The reasons for being dropped are varied and arbitrary. Too many claims? Drop. Flood zone? Drop. Solar panels? Yeah, that's a drop.

My insurer was one of at least 15 that exited Florida. If I could not find coverage for my home, I would be shoved into "force-placed" insurance – a lightly regulated, expensive product engineered to protect banks (not homeowners).

For many, force-placed insurance is a one-way street to a defaulted mortgage.

Welcome to the 'last resort'

At this point, your agent will try to place your policy with the so-called "insurer of last resort," Citizens Property Insurance, a government-created private non-profit, a backstop for the uninsurable dregs.

Since its 2002 creation, Citizens has exploded to become the state's largest insurer – a yolk it wears reluctantly, as every new policy it writes represents a failure of the free market.

Citizens' has been vocal about its reticence to add new policies, anticipating it will surpass 1.2 million by 2023. CEO Barry Gilway said as much, stating that "this marketplace is completely, 100% out of control." He and others in the insurance industry pin the blame on frivolous litigation, and he worries that the last resort is reaching capacity.

If you're like me and many others, the last resort has a big "no vacancies" sign hanging from it. You see, Citizens can deny you for myriad reasons – like if your home is appraised at more than $700,000, or if you, like me, filed more than one non-weather-related water damage claim within 36 months of each other. Even if you are admitted to Citizens, the cost is higher than the private market, and the coverage leaves much to be desired.

Citizens also offers so-called "HO8" policies, but it would be pointless to expound on them here because, as one agent told me, "They don't pay enough commission for any of us to write them."

Florida won't save us

Tasha Carter is Florida's Insurance Consumer Advocate, and a very responsive one at that, but there's frankly not much she can do to help. Carter told me by e-mail: "[T]he current state of our homeowners insurance market has created significant consequences for homeowners that are simply unsustainable... [R]egrettably, your experience is not unique."

Two years ago, I was paying less than $1,900-a-year for a comprehensive policy. Today, I'm paying more than $6,000 for something that can barely be described as insurance and does nothing beyond protecting my bank.

"I'm scrambling to find financial assistance for a new roof," wrote one Florida woman on a recent Facebook post I shared. "I'm 63, low income [and] terrified of losing my home... Help!"

But what would help even look like?

Solutions? In this political economy?

There must be legislation to address the rampant fraud that preys on policy loopholes, insurers, and consumers. Unfortunately, the national political environment is hopelessly partisan and split. This makes it unlikely that any legislation would earn broad support.

One way to pressure lawmakers is organizing through community. All 21 million homeowners and renters in Florida share this burden. We should come together to demand that our leaders abandon pointless culture wars and legislate solutions. This is why, feeling alone and stymied by this frustrating process, I started a Facebook group devoted to helping share stories and resources with others in this situation.

But I've seen no indication that new laws would bring insurers back to the market. Imagine a fast-food chain that lost $2 for every burger it sells while enduring exponentially higher risks that its restaurants will be flattened by a hurricane. If a new law meant that the chain would only lose $1 – and still be subject to the extreme weather risk – would that be adequate to draw them back?

Insurance companies are not blameless. Even those not considered predatory still regularly deny valid claims. Fighting with your insurance carrier can make you feel powerless. Their executives enjoy outsized compensation as their products fail consumers. There is fraud, to be sure, but it's enabled by their very business model.

Proposing a new model

It's time to consider that, in a state that is most at-risk for extreme weather events, maybe it can't be profitable. There are a million ways to get rich in America. Maybe insuring homes in hurricane alley isn't one of them.

Any solutions must challenge or even upend the failed for-profit market altogether by outlining new models, be they non-profit providers, a government agency, or publicly owned cooperatives.

I'm not an expert in this industry. I can't tell you if any of these ideas would work. I can only tell you what isn't working: this system, that has an entire state on pins and needles waiting to receive one dreaded letter.

David Quiñones is a Miami homeowner. He started the group Forced Out Florida – Floridians Dropped By Their Homeowners Insurance to help other homeowners share their stories and access information and resources they need.

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