Why Extreme Weather is Making it Harder to Get Insurance in Florida

Team Marble
|
October 25, 2022
Why Extreme Weather is Making it Harder to Get Insurance in Florida

We know that extreme weather wreaks havoc on the insurance industry (remember the 2021 Texas snowstorms?). But even before Hurricane Ian made landfall in early October 2022, Florida was already weathering its own homeowners insurance storm (sorry, sorry, the storm metaphor just wrote itself!). 

Florida’s insurance industry is in crisis. Property insurers across the state are facing insolvency. Rates are three times the national average. There’s widespread roof-replacement fraud. And Citizens Property Insurance Corporation, the state-run “insurer of last resort”, wants to hike rates by nearly 11%, the highest increase legally allowed. 

Although Florida accounts for only 9% of the country’s homeowners claims, it has almost 80% of the lawsuits, many of which are fraudulent. This means that insurance companies have to pay out more than they expected, which costs them…(*checks notes, runs calculator*) a lot of money. In fact, underwriting losses over the past two years have exceeded a billion dollars

As a result of all of these factors, some companies are preparing to stop operations altogether. United Property & Casualty Insurance, for example, has filed plans to withdraw from Florida (as well as from Louisiana and Texas) owing to a downgrade to its financial stability rating and massive financial losses. Others have been forced into receivership, meaning they need help to avoid bankruptcy. And still the lawsuits continue. 

All this spells trouble for Floridian homeowners. Fewer companies means fewer options — and less coverage available in Florida overall. It also, most likely, means higher premiums. And Hurricane Ian — forecast to cost insurers over $50 billion — is only going to make a bad situation worse. Industry experts predict that some providers will go bankrupt as a result of the number of claims they have to process.

Beyond the providers, Hurricane Ian is also expected to be financially ruinous for homeowners, especially for people whose homes weren’t protected against floods. The homes that did have flood insurance tended to be coastal, yet much of the flooding occurred inland, triggered by storm surges and overflowing rivers. 

In fact, in the nine counties that were declared disaster zones by President Biden, only 29% of approximately 1.8 million households had federal flood insurance. Even those who did have flood protection may face financial difficulties, and experts foresee a spate of missed payments. All of which will further destabilize an already rocky market. 

As weather events become more unpredictable and more disastrous, it’s important to realize that what once seemed unnecessary could now be lifesaving. The best you can do is to try to be prepared, so first things first, talk to your homeowners insurance provider. These agents have all the info and will be able to help make sure that your policy fits your needs (and they can advise you if you should add flood insurance too, for instance). 

If you’re not happy with your current coverage, then now is the time to switch — well before the next weather event hits! While it may sound daunting, switching providers doesn’t have to be. Plus, putting in the effort now will save a huge headache later. 

And Marble is here to help! Use Marble’s comparison tools to quickly compare policies and to find coverage that makes sense for your needs. Sign up for Marble today and manage all your policies from one single platform — and even earn rewards on your insurance, too!

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