Florida’s home insurance market crisis has reached a critical point, with private insurers rapidly exiting the state as hurricane risks intensify. According to a new analysis by Deep Sky Research, the majority of homeowners in Florida now rely on the state-backed insurer, highlighting deep concerns about the stability of property coverage in the region.
Florida Home Insurance Market: Sharp Declines in Private Coverage
The main keyword, Florida home insurance market, is at the center of growing instability. Over the past decade, the number of active home insurance policies in Florida has dropped sharply. Deep Sky Research reports that active policies fell by 78% from 2014 to 2024, decreasing from 3.2 million to just 710,000.
During the same period, the number of new policies written each quarter also plummeted by 77%, falling from 164,000 to 37,000. Despite these declines, average premiums increased by 22% after inflation, reaching $3,454 per year. Yet, insurers continue to report losses and withdraw from the market.
State Insurer Citizens Property Insurance Corporation Dominates
As private insurers leave, the Citizens Property Insurance Corporation—Florida’s insurer of last resort—has taken on a much larger role. According to Deep Sky Research, Citizens’ share of the home insurance market grew from 6% to 63% in just ten years. The corporation, designed as a temporary safety net, now covers most homes in the state.
Officials warn this shift could have serious financial consequences. If catastrophic hurricane losses exceed Citizens’ $15 billion in reserves, the corporation can levy surcharges on all property and casualty insurance policies throughout Florida. This “hidden tax” could impact even those who do not own homes.
Hurricane Risks Drive Insurance Market Instability
The primary force behind the Florida home insurance market crisis is the increasing frequency and severity of hurricanes. Deep Sky Research highlights a 300% rise in extreme hurricane events over the past 40 years. Maximum rainfall during storms has also increased by 33%.
The report uses a comprehensive hurricane severity scale, factoring in rainfall and storm surge alongside wind speed. Findings show that the most destructive hurricanes are now more common and more severe. Most damage, according to the analysis, is caused by water—storm surge and extreme rainfall—rather than wind alone.
Rising Sea Levels and Increased Rainfall
Rising sea levels allow storm surges to penetrate further inland, increasing the risk of flooding. As the atmosphere warms, it holds more moisture, leading to heavier rainfall during storms. In 2024, the National Flood Insurance Program paid out more in claims than in the previous 14 years combined, primarily due to Hurricanes Ian and Helene, according to Deep Sky Research.
Economic Implications for Florida
Experts warn that the Florida home insurance market crisis could have broad economic impacts. Without affordable insurance, property transactions may slow or stop, threatening home values. National banks with large mortgage portfolios in Florida could face increased risks, and real estate investment trusts exposed to the state may see their valuations drop.
Municipal bonds backed by property taxes could also be downgraded if property values fall. Economists describe this cycle as a “death spiral,” where escalating climate risks drive insurers out, leading to higher premiums and further instability. In an unexpected development, Florida Peninsula Insurance proposes a historic rate cut for homeowners, offering some hope for relief in a turbulent market.
Citizens Insurance and the “Hidden Tax”
According to Deep Sky Research, if Citizens Property Insurance Corporation faces losses beyond its reserves, it can impose surcharges on all property and casualty policies in Florida. This means renters, drivers, and businesses could all see higher insurance costs, even if they do not own homes.
- Citizens’ reserves: $15 billion
- Potential surcharges: All property and casualty policyholders statewide
- Risk: Widespread premium increases after major hurricanes
Climate Change and National Trends
The Florida home insurance market crisis is part of a wider trend affecting other states. Deep Sky Research notes that California has experienced similar issues, with the number of FAIR Plan policyholders more than doubling from 2020 to 2024 due to wildfire risks. The report, “Uninsurable: Florida’s Home Insurance Collapse Signals National Trend,” suggests that other coastal states could face similar challenges as climate risks increase.
Max Dugan-Knight, a climate data scientist at Deep Sky Research, stated, “The insurance crisis in Florida is the financial system’s early warning of climate catastrophe.” He referenced former California Department of Insurance Commissioner Dave Jones, who said, “The canary in the coal mine is dead.” Notably, Florida ranks as the most expensive state for homeowners insurance, further exacerbating the challenges faced by residents and the broader economy.
Current Hurricane Season and Ongoing Concerns
Although 2025 has seen a relatively quiet hurricane season so far, concerns remain high. Hurricane Melissa, currently threatening Jamaica, has renewed fears that a single major storm could trigger catastrophic losses for uninsured and underinsured homes in Florida.
Deep Sky Research cautions that the insurance market is already signaling the scale of climate risk. The broader economy—including banks, investors, and local governments—may soon feel the effects if the crisis worsens.
Frequently Asked Questions About Florida Home Insurance Market
What is causing the Florida home insurance market crisis?
The main causes are the rising frequency and severity of hurricanes, along with higher payouts from storm damage. As a result, many private insurers are leaving Florida, making it harder for homeowners to find coverage.
How much have home insurance premiums increased in Florida?
According to Deep Sky Research, average home insurance premiums in Florida have risen by 22% after inflation over the past decade. The average annual premium is now $3,454.
Are there any options for homeowners if private insurers leave?
Yes, most homeowners can turn to Citizens Property Insurance Corporation, the state-backed insurer of last resort. However, this program now covers a majority of homes in Florida and may face financial pressure after major storms.
Can you get flood insurance separately from home insurance in Florida?
Yes, flood insurance is available through the National Flood Insurance Program and some private insurers. It is often required in high-risk areas and covers damage from flooding not included in standard home insurance policies.
Where are the most affected areas in Florida’s home insurance market?
Coastal regions and areas prone to hurricanes and flooding are most affected. These areas have seen the greatest loss of private insurance options and the highest premium increases.
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