In Florida, roughly one in five homes has a separate flood insurance policy, in addition to their standard homeowner’s policy. Homeowner’s insurance usually doesn’t cover flooding. Flood insurance rates are rising fastįlorida flood insurance rates are also rising fast, according to data from the Federal Emergency Management Agency, which runs the National Flood Insurance Program. “Areas that have higher claims costs are going to have higher rates in general,” Hosfield said. By comparison, wind claim costs have tripled in Florida overall and doubled nationally over that same time period.Īs a result, South Floridians are facing higher premiums than the rest of the state. All of these factors, Hosfield said, are especially prevalent in South Florida.ĭata from LexisNexis shows that the average cost insurers have to pay to cover a wind damage claim in the Miami metro area has roughly quadrupled since 2010. Hosfield also noted that as people build more expensive homes in vulnerable, disaster-prone areas, the average cost of insurance premiums rise. Florida leads the country in insurance lawsuits, although the state passed a law this year designed to make it harder for people to sue their insurance companies. Other factors, like fraud and lawsuits, can also raise insurers’ costs. The more it costs to hire a contractor and buy wood, concrete and other materials, the more insurers have to pay to rebuild a house - and the more they charge in premiums to cover their costs. “The cost of building materials has gone up a lot.” “Part of the story is inflation,” said George Hosfield, senior director of home insurance for LexisNexis Risk Solutions, which is owned by RELX, a company that provides analytics and data to business and professional organizations. “So there is a bit of ‘Is this climate change? Is this the new norm? Should we increase the frequency that we expect these events in Florida?”īut hurricane damage is just one reason Florida’s insurance rates are rising so fast. “Florida has had its fair share of events in the last five or six years,” said Dittman. That’s part of the reason premiums are rising in the state, according to Chris Dittman, head of Florida strategy at Aon Reinsurance Solutions. Those three storms alone caused nearly $200 billion in damage in Florida. Lately, Florida has been hit with a damaging series of hurricanes, including Hurricane Irma in 2017, Hurricane Michael in 2018 and Hurricane Ian in 2022. Homeowner’s insurance policies typically cover wind damage from hurricanes, in addition to other calamities like fires, lightning strikes and theft. And new residents keep flooding into them, concentrating the state’s insurance risk.Īll these factors have created an insurance crisis that’s driving up the cost of living for homeowners and renters from the Keys to the Panhandle. Developers keep building pricey homes in vulnerable floodplains and along eroding coasts. Rising interest rates have raised the cost of borrowing for insurance and reinsurance companies. Inflation has driven up the cost of materials and labor to repair or rebuild a house. But there are also other, more mundane causes, according to insurance experts.
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