Florida, known as the Sunshine State, is facing a pressing question: Why are home insurance companies leaving Florida? The state is already experiencing significant impacts from climate change, with floods and hurricanes causing extensive damage to homeowners. The aftermath of these natural disasters has profoundly affected Florida’s property insurance market, resulting in a surge of insolvencies and an alarming increase in claims payouts. As a consequence, home insurance companies are abandoning the state, leaving homeowners in a precarious position with skyrocketing premiums and limited coverage options.
In this blog, we will explore the reasons behind this exodus and shed light on the potential solutions to the home insurance crisis in Florida.
Why Are Home Insurance Companies Leaving Florida?
The escalating climate crisis has been instrumental in driving home insurance companies away from Florida. The state witnessed the devastating impact of Hurricane Ian, which alone caused a staggering $65 billion in property damage. In 2022, property insurers had to pay over $100 billion in claims, a 50% increase from the average annual payouts of the previous decade. Consequently, fifteen property insurers faced insolvency in 2020, leaving a struggling market for the remaining companies.
One of the primary drivers of this crisis is the excessive development in high-risk areas susceptible to storm damage and flooding. Florida’s flood risk disclosure laws have also been inadequate, failing to provide homeowners with the essential information needed to make informed decisions about their property’s vulnerability. Moreover, the lack of effective climate policies further compounds the challenges homeowners and insurance companies face.
Compounding the issue is the flawed structure of the National Flood Insurance Program (NFIP), which plays a significant role in flood insurance policies in the United States. In an attempt to keep flood insurance affordable, the program receives subsidies from the Treasury Department, allowing artificially low insurance rates in high-risk areas. This encourages further development in vulnerable regions like Florida’s coastal cities.
While there is hope for change, as the NFIP has updated its methodology for determining flood risks and aims to eliminate subsidies for high-risk properties, Florida must take advantage of this momentum and initiate its reforms. The passing of Senate Bill 2-A in 2022 was a step toward addressing excessive insurance claim litigation. Still, the state needs to tackle the root causes of the crisis to create a sustainable insurance market for homeowners.
What to Do If Your Florida Home Insurance Provider Pulls Out
Given the precarious state of Florida’s insurance market, homeowners may find themselves facing policy cancellations or nonrenewals. If your home insurance provider decides to leave the state or cancel your policy, here are some steps to take:
Contact Your Insurance Provider
Reach out to your insurance company representative or agent immediately to understand the reason for the cancellation or nonrenewal. Different situations may have distinct timelines for finding new coverage, so it is crucial to clarify this with your provider.
Start Shopping for a New Policy
Given the challenging insurance landscape in Florida, it is essential to start searching for new quotes without delay. Many homeowners will be in the same predicament, all seeking new coverage simultaneously. Beginning your search promptly will give you enough time to compare policies and choose the one that best suits your needs.
Complete Any Pending Repairs
Enhancing the condition of your house can aid in securing new coverage. Florida home insurance companies often consider weather-proofing measures homeowners take when underwriting policies. Ensuring your property is in good condition will strengthen your position when obtaining new insurance.
If you encounter difficulties finding new coverage or feel treated unfairly, do not hesitate to contact the Florida Office of Insurance Regulation (FLOIR). They can assist and guide in navigating the insurance market and may help you find alternative coverage.
Need Help Getting Your Insurance To Pay?
Why are home insurance companies leaving Florida? That’s a question whose answer won’t solve the problem Florida homeowners are facing as they scramble to find new coverage. If you find yourself struggling with insurance claim disputes or need assistance in navigating the complexities of the insurance process, don’t hesitate to seek help. Reach out to RRBH Law at 305-800-4663. Our expert team proudly serves the Greater Coral Gables Area, including Key Biscayne, Coconut Grove, Hialeah, South Miami, Pinecrest, Palmetto Bay, Kendall, Glenvar Heights, Westchester, West Miami, Brickell, Sweetwater, Doral, Miami Springs, and Miami Beach.
RRBH Law understands the challenges homeowners face in the wake of home insurance companies leaving Florida. We are here to provide you with dedicated support and legal expertise to ensure that you receive the insurance coverage and compensation you rightfully deserve. Our team of professionals is well-versed in handling insurance claim disputes, and we are committed to advocating for your best interests throughout the process.