Great weather, affordable housing and low taxes has had people flocking to Florida for decades. More recently, however, the trend has started to reverse due to high insurance premiums. According to the U.S. Census Bureau a shocking 276,000 people left Florida in 2022. It’s believed that the increase in insurance premiums have something to do with the uptick of departures.

The Census also showed that most of the Florida residents remained in the sun belt. They often ended up in states like North Carolina, Texas, Tennessee, and Georgia. These states also have low housing costs and tax rates, similar to Florida. However, all these states are not experiencing the same insurance crisis that is happening in Florida.

Insurance skyrockets and Insurers are taking the parachutes

The Florida insurance industry has suffered for a while now. Rising insurance costs are mainly being caused from a rise in more dangerous and frequent hurricanes. Since 2017, a shocking four hurricanes have made landfall in Florida and even more astounding, 75% of them have been a category 4 or 5. The damage totaled in the tens of billions of dollars.

Hurricanes have occurred so frequently that insurers hardly have time to recover from the last storm before the next one reaches the shores of the Sunshine State. Spiking property values have pushed up insurance costs as have the increase in the cost of claims. With all the new, unexpected problems, insurance companies that weren’t set up for the current situation, are failing.

In order to cover potential losses, many insurers buy reinsurance. Reinsurance is an insurance policy that insurance companies buy to protect themself from natural disaster costs. Recent hurricane claims have caused reinsurance rates to rise, which has led to a spike in home insurance premiums for any Florida home or business owner. The rise in reinsurance prices is causing many insurance carriers to leave the state entirely.

A New Price Problem

Florida insurance premiums have gone up by 300% in the last five years, according to the Insurance Information Institute. Floridians often pay for $4,200 annually, and that’s if they can get insurance at all. For reference, the average American pays $1,700 for home insurance.

For many Floridians, instead of renewal notices with higher premiums they are receiving non-renewal notices because their insurance carrier is leaving the state. This has left many Floridians struggling to find a new insurance policy.

Having Insurance is Only Half of the Fight

Even homeowners who can afford their outrageous insurance premiums are struggling. Every Hurricane brings an onslaught of lawsuits that can number in the thousands, between the angry homeowners and insurance companies. Ever increasing legal costs is another reason insurers are leaving the Sunshine State.

Is there a Solution?

With all of the insurers leaving Florida, Citizen’s Property Insurance Corporation has become one of the state’s largest insurance providers. Unfortunately, Citizen’s is a state-run insurance provider that was meant to be a last resort for people struggling to find insurance. However, with the lack of other options it’s quickly becoming the first option for many Floridians.

For a state that doesn’t charge income taxes, being on the hook for millions of home insurance policies is highly problematic. Another hurricane with the power of Hurricane Andrew could possibly bankrupt the state if it were to hit Miami or Tampa. The insurance market is so unsteady that many Floridians are fleeing to find cheaper and more certain insurance.