Property insurance rates in Florida have risen by 42.5% since 2019

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A new report reveals that property insurance rates for owners in Florida have surged dramatically over the past few years.

Florida TaxWatch has published an in-depth analysis of the state’s property insurance market, highlighting factors contributing to its instability and the 42.5% increase in rates since 2019. Key factors include damages from hurricanes and litigation pressures, which have strained insurers and led some to exit the state.

The report indicates that Florida’s property insurance market is precarious and heavily dependent on state-run insurers as a fallback for homeowners with no other options. Despite being a last-resort insurer, the Florida Citizens Property Insurance Company covers at least 17% of the state’s property insurance market and is the most expensive option.

The report describes the rising enrollment in Citizens as “alarming” because if its funds are depleted, state law mandates assessments that can be passed on to all policyholders, including those with private insurance, homeowners, renters, automobile, and pet insurance.

A 2021 Florida TaxWatch report states that about 70% of Floridians live in coastal counties and are at risk of chronic flood damage. The report notes that as sea levels rise, more properties face increased risk. This currently includes approximately 64,000 homes, valued at around $26 billion, at high risk of severe flooding.

Florida TaxWatch estimates that by 2100, over 1 million homes will be at risk, further escalating property insurance rates. Without market stabilization, high rates could drive some residents to leave the state.

Florida leads the nation in insurance costs, accounting for 10.8% of all U.S. premium costs. The report notes that premiums vary by county, from $1,824 in Sumter County to $8,162 in Monroe County.

Since 2019, the Legislature has implemented reforms to combat insurance fraud and reduce burdens on insurers. The report acknowledges that these efforts are starting to show positive results but advises lawmakers to stay vigilant to prevent market destabilization and to work on enhancing resiliency.

Florida TaxWatch recommends reducing reliance on Citizens by decreasing the nmber of policies it holds and encouraging new private insurance companies to enter the state.