American home improvement media company This Old House released details about homeowners’ experiences with the state’s insurance crisis.
“Combined with high insurance rates and the departure of insurance companies from Florida, the high cost of repairs following severe weather events can largely be blamed on homeowners competing for labor and materials. As more frequent storms do more damage,” said the media brand.
Current numbers show Florida is the most expensive state regarding home insurance costs. According to the study, 42% of the cost increase came following Hurricane Ian in 2022. Analysts say home insurance rates have been climbing an average of 33% yearly since 2020.
With home insurance costs still increasing, housing experts say this is deterring newcomers from purchasing a home, especially in the South Florida market.
After Hurricane Ian hit South Florida, the Fox Business Network reported that many residents who decided to sell their homes were unable to find buyers. Besides the increase in insurance premiums, elevated mortgage rates also contributed to keeping prospective buyers away.
The report also outlines that not just the weather as the main cost but also the inflationary environment since COVID-19 has contributed to Florida insurers paying out much more for major claims, and many have completely stopped writing new policies in Florida.
But Florida’s Chief Financial Officer (CFO) Jimmy Patronis says the market should stabilize soon with the announcement of 8 new insurance companies coming to the state. Insurance experts say costs should level out sometime between the next 12-18 months.
In 2023, Florida lawmakers passed sweeping insurance legislation dealing with tort reform, roofers taking advantage of the market, and homeowners filing unnecessary claims.
