Hurricane Ian claims could topple Florida home insurance market: analysts

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Hurricane Ian claims could topple Florida home insurance market: analysts

After churning its destructive path through Florida, Hurricane Ian could do fatal damage to the state’s home-insurance market — posing a potential political headache to Republican Gov. Ron DeSantis.

Long before the storm, Florida’s property insurance system was a mess. Hundreds of thousands of Florida homeowners lost their private insurance policies over the last two years, after a dozen companies left the market in the face of billion-dollar annual losses, including several that went under.

Now, the damage wrought by Ian may be the industry’s breaking point in the state.

More than a million Florida homeowners have been forced to turn to Citizens Property Insurance, the state’s publicly funded “insurer of last resort” — meaning that state taxpayers could be on the hook for billions of dollars’ worth of hurricane damage. Early estimates say the storm caused at least $63 billion in damage to privately insured property alone, not including flood damage covered by the National Flood Insurance Program, which provides most flood policies.

Besides just physical damage, Hurricane Ian could do fatal damage to the state's home-insurance market, too.
Besides just physical damage, Hurricane Ian could do fatal damage to the state’s home-insurance market, too.
Photo by RICARDO ARDUENGO/AFP via Getty Images

Annual premiums already cost Florida homeowners $4,200 on average, triple the national average rate.

The long-brewing crisis has turned home insurance into a campaign issue for Democrat Charlie Crist, DeSantis’s challenger in November’s gubernatorial election, who on Monday called the incumbent “the worst property insurance governor in Florida history, period.”


Here’s everything to know about Hurricane Ian:


Florida’s geography, which regularly puts it in the path of severe storms, contributes to its insurance woes. But its unusually high rates of litigation worsen the situation, state officials say.

A lawyer-friendly environment means that Florida sees 79% of the nation’s homeowners’ insurance lawsuits, the Financial Times reported — but only 9% of all claims.

“With Ian, especially if this storm leads to litigation, it makes me wonder if the market can sustain this,” said Nancy Watkins of Milliman, an international actuarial consulting firm.

Dan Beazley rolls a cross through an area where homes were destroyed when Hurricane Ian passed through the area on October 1, 2022 in Fort Myers, Florida.
The damage wrought by Hurricane Ian may be the insurance industry’s breaking point in Florida.

An aerial picture taken on September 30, 2022 shows the only access to the Matlacha neighborhood destroyed in the aftermath of Hurricane Ian in Fort Myers, Florida.
Annual insurance premiums cost Florida homeowners $4,200 on average, which is triple the national average rate.

More than a million Florida homeowners have been forced to turn to Citizens Property Insurance because of Hurricane Ian.
More than a million Florida homeowners have been forced to turn to Citizens Property Insurance because of Hurricane Ian.

A member of the Indiana Task Force 1 Search and Rescue team looks for anyone needing help after Hurricane Ian passed through the area on October 1, 2022 in Fort Myers, Florida.
Florida’s location, which regularly puts it in the path of severe storms, is a factor for its insurance woes.

DeSantis, who convened a special legislative session in May to address the insurance problem, acknowledged that the resulting short-term fix — a $2 billion reinsurance backstop for Citizens Property Insurance — is far from enough.

“This is a problem that we’re going to continue to tackle,” DeSantis said Monday, hours before the hurricane hit. “Clearly, there’s other things legislatively that I’d like to see done.

“But if you’re asking would I rather not have had a storm hit us, then the answer is yes.”

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