On the Florida coast, Forst Myers Beaches suffered the consequences of Hurricane Ian. Due to the damage caused, Citizens Property Insurance Corporation has been of great help in resolving financial and personal problems. Likewise, the First Street Foundation and Mark Friedlander, along with Jeremy Porter, explain that in the Gulf of Mexico, due to the significant temperature fluctuations, hurricanes will increase, and consequently, insurance premiums. Based on information provided by Zilloso, they reveal that home sales have decreased in some areas, such as Sanibel Island. The U.S. Department of Defense recently announced that this climate phenomenon poses a risk to the American population in this area. Read on to learn more.
The insurance crisis in hurricane-prone Florida
Dayna and Matt Fancher lost their home in Fort Myers Beach, Florida, to Hurricane Ian back in 2022. One month into this year’s hurricane season, the couple is still paying their home insurance policy — currently twice as costly — at the same time they are fighting the firm in court over their claim.
The Fanchers, who have lived in their Fort Myers Beach home for almost three decades, explained that their home insurance provider paid them only a third of what it would cost to build again their home, and that adjusters over and over disputed their storm damage claims. Finally, the Fanchers say, they took out construction loans to be capable of moving back into their home.
“We have the same coverage that we had, we’re paying double, and we didn’t get the assistance that we needed,” Matt Fancher said.
The Fanchers’ dilema is just one of many related to the insurance crisis in hurricane-prone Florida. Rates are sky-high and awaited to continue growing as catastrophe claims emerge and Floridians face few insurance options and increased scrutiny during underwriting.
“Since 2021, Florida has experienced four major hurricanes”
Since 2021, Florida has gone through four major hurricanes: Ian, Helene, Idalia and Milton, and premiums have climbed by nearly 30% statewide. Florida inhabitants can at this time expect to pay almost $10,000 a year on average in premiums, which makes the the most expensive place in the U.S. to buy homeowners insurance.
In Fort Myers Beach, a tiny town on narrow Estero Island off Fort Myers, annual premiums jumped from about $9,000, close to $14,000 from 2019 to 2024, according to data obtained by First Street Foundation, a climate risk modeling firm.
In the wake of Hurricane Ian, Floridians registered more than half a million residential catastrophe claims, according to Florida’s Office of Insurance Regulation. Up against an predicted $50 billion to $65 billion in insurance losses related to Hurricane Ian, various homegrown Florida property insurers were declared insolvent, while major national insurers such as Farmers announced they would pull back or no longer offer coverage in the state becuase of the increased hurricane risk.
Homeowners in the South are the most vulnerable to catastrophe
Almost 13% of homeowners nationwide are with no insurance. In some areas of the South, the share is much higher . But hurricane risk in Florida is growing as human-caused climate change warms the atmosphere and raises sea surface temperatures in the Gulf of Mexico. Even hotter conditions are capturing moisture and fueling hurricane intensification, creating wetter, more powerful hurricanes that leave Florida increasingly vulnerable to storm harm.
Jeremy Porter, a climate risk profesional at First Street Foundation, explains that growing insurance costs signal the deep impacts of climate change in west Florida, as communities like Fort Myers Beach grapple with recurring damage and costly recoveries.
“Over the last few decades, we haven’t kept up with climate risk and quantified it properly in our risk modeling. Now, we’re playing catch-up and it’s driving up insurance rates very rapidly, and people are feeling that in their household budgets,” Porter said.
Al along with scarce alternatives for home insurance, more and more Floridians have began buying insurance from Citizens Insurance Property Corp., Florida’s not-for-profit state-backed insurer, and Porter says this rapid movement has also pushed up insurance costs.
By 2055, Porter exposes that home insurance premiums could rise by 213% in the Tampa metro zone dure to the fact of hurricane risk. Climate risks are, in addition, interrupting insurance markets in other parts of the country. In Sacramento, California, residents may face a 137% increase because of the increased wildfire danger, as an example.
Porter explained that declining home prices in Florida could also influence on home insurance rates and availability. By the time property values fall in places that are vulnerable to hurricanes or other extreme weather, insurers could be able to interpret that decline as a warning sign of growing physical or market risk, leading to increased scrutiny during underwriting and potential spikes in premiums.
According to Zillow data, home prices in Fort Myers Beach are down about $200,000 from their pre-Ian prices, and almost 86% of sales over the last year came in under list price, a general indication that sellers are having a hard time offloading their properties.
Joanne Klempner, who has been living part time in Fort Myers Beach since 2016, says that selling her home is not a financially real option after spending so much on reconstruction post-Hurricane Ian.
“At this point, we’re in for the long haul because we have to be. I think whether people want to continue to invest in Fort Myers Beach is the bigger question,” Klempner said. “When you don’t have a hurricane for 30 years, the risk feels worth it to live in paradise. When you have three bad hurricanes within 18 months, it becomes questionable.”