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ven before Hurricane Ian made landfall in Florida last week, the state's property insurance market was already in its own state of disaster. According to the Insurance Information Institute, Florida homeowners pay nearly three times the national average for property insurance with premiums rising about 33% each year compared to the typical American’s annual increase of 9%.
Another contributing factor to the problem is that according to the state's insurance regulator, nearly 80% of all homeowners' insurance lawsuits in the U.S. come from Florida. By contrast, the state accounts for only 9% of all homeowner claims. Insurance companies operating in Florida say they have been forced to raise rates to cover the costs of handling lawsuits.
In addition, as storms have grown more destructive, reinsurance costs have grown significantly. Some reinsurers are pulling back from Florida. Others are raising rates — reinsurance costs for Florida insurers rose by as much as 50% this year, according to a report.
Even as damage estimates rise, officials have expressed confidence that insurers will be able to pay out Hurricane Ian claims. However, state legislator Brandes said if rates continue to rise by 30% or more, as they have done for many Floridians in recent years, some Florida homeowners may end up paying more for insurance than they do for their mortgage.