Florida’s insurance woes could make Hurricane Ian’s wrath even worse
And as insurers assess the impact of the storm and assess future risk as extreme weather events grow more common, coverage could get pushed even more out of reach for Floridians.
“Obviously this is going to be a multibillion-dollar storm, and with the insurance industry already crumbling, this is going to be devastating,” said state Sen. Jeff Brandes, a Republican.
A Fitch Ratings analysis Thursday estimated insured cost losses could be from $25 billion to $40 billion in the state.
A unique confluence of factors makes Florida an exceptionally difficult place for private insurers to do business, and for homeowners to find affordable comprehensive plans from private companies. As Ian has shown, the state is susceptible to dangerous weather events, something that’s likely to increase over time because of climate change. Insurance companies’ risk models, which incorporate thousands of years of weather data, have proved unreliable when it comes to the most recent storms, said Danielle Lombardo, chair of the Global Real Estate Practice at Lockton, an independent insurance brokerage and consultancy.
“It is the most risky piece of land in the world for insurers from a catastrophe standpoint,” Lombardo said.
Lawmakers and industry officials said Ian could doom private homeowner insurers unless the state legislature steps in, while consumer advocates said residents faced getting completely priced out of the market.
More than 400,000 Florida consumers have lost coverage already this year due to failed insurers or policy increases, according to Mark Friedlander, corporate communications director for the Insurance Information Institute, a research and communications nonprofit for the industry.
Already, some consumers “are now in a position where they are having to attempt to try to locate new coverage, and they just simply aren’t able to find any insurance company that is willing to write them,” said Tasha Carter, Florida’s insurance consumer advocate.
Florida’s laws regarding insurance litigation tend to favor plaintiffs, according to industry officials and independent experts, so that insurance companies are constantly dealing with a barrage of lawsuits. According to the state’s Office of Insurance Regulation, Florida accounted for 76 percent of all homeowners lawsuits nationwide in 2021.
Meanwhile the state’s population has continued to grow, creating more demand, even as risk-averse insurers are trying to exit the marketplace, leading to less supply. All of this combines for…
Read More: Florida’s insurance woes could make Hurricane Ian’s wrath even worse