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A look at the Florida home insurance crisis

On Behalf of | May 5, 2022 | Blog, Insurance Law

Property owners in California want to have the ability to insure their homes and businesses at affordable rates. This protects their assets in the case of storms and fires and other unpredictable disasters.

In Florida, the home insurance industry faces serious problems that raise the question of whether the problem will spread to other locations.

Insurers leaving Florida

An article by Wink News reports that at least five Florida insurance companies have stopped doing business in the state. This development leaves homeowners with fewer options for insurance and results in much higher premiums. The problem began several years ago. Many observers call the situation a crisis.

Sources say that out of 52 insurance companies operating in Florida, only three made a profit. The total loss for insurers in the state totaled $1.6 billion. Because of these mounting losses, many insurance companies have stopped offering homeowners policies in the state, with five companies recently pulling out of the state.

Homeowners relying on insurer of last resort

Many people now must get insurance coverage from the Citizens Property Insurance Corporation. The state lists this carrier as an insurer of last resort, and the company’s business has grown from 222,000 policies in 2020 to over 777,000 at present.

This reliance on fewer insurance companies can lead to rapid premium hikes, making affordability an issue. State lawmakers might take action to fix the problem, with some looking to change the legal avenues available to policyholders who file suit for denied claims. As of right now, the insurance problem seems limited to unique factors that exist in Florida.