Florida Insurance Skyrockets as Real Estate Investors Sound Alarm

The ongoing home insurance crisis in Florida has gotten the attention of real estate investors who now warn that, if not addressed, higher premiums might make it difficult to get a mortgage in areas vulnerable to extreme weather events.

Floridians currently pay the most expensive home insurance premiums in the country, with residents of the Sunshine State paying on average more than $4,200 per year compared to the national average of $1,700, according to data from the Insurance Information Institute, or Triple I.

The ongoing crisis, which has its roots in the excess litigation that has characterized the state for years now, has been fueled by an increase in the frequency and severity of extreme weather events like hurricanes, floods and tornadoes, which some scientists have linked to climate change.

This increase in the number and devastating impact of natural disasters has in turn triggered an exodus of major insurance providers in the state between the end of 2022 and 2023, leaving many residents with a lack of options to insure their homes.

A recent report by Karen Clark & Co, a Boston-based risk assessment management firm, found that insurance premiums are expected to continue rising in Florida this year as the risk of extreme weather events continues to grow.

Also, insurance premiums have risen and will continue rising because construction costs, which are taken into consideration when determining how expensive it would be to rebuild a home after being struck by a hurricane or another similar event, have risen by 40 percent since 2017.

"This is the biggest story in residential real estate over the next decade," real estate investor Sean O'Dowd wrote on X, formerly known as Twitter. "If the insurance increases don't stop, it becomes very difficult to get a mortgage in hurricane and wildfire prone areas," he added.

His comment was made in response to another social media user, who manages an account commenting on the real estate sector, writing that their parents' insurance bill in Florida had "jumped from $2,500 to $6,000 in the last three years." The same person said that the rate jumped 50 percent in 2023 alone.

Newsweek contacted O'Dowd for comment by direct message on X on Wednesday.

Several Floridians previously wrote to Newsweek about their own insurance woes, with many mentioning that their insurance premiums have reached levels they can hardly afford. Robert Kantor, a resident of Broward County, said that his homeowner's insurance doubled to more than $7,000 last year. He said that with taxes, he is paying in excess of $10,000 "just to stay in my home."

Mike Derham, who owns a three-bedroom holiday home on Melbourne Beach with his family, previously told Newsweek that the property now costs him $11,000 per year to insure, adding that they would "be selling up" because of the increased premiums.

Do you live in Florida and have been impacted by higher home insurance premiums? Contact g.carbonaro@newsweek.com to share your story. Your response might be published in future articles.