Home Insurance Prices Could Rise Again After Hurricane Idalia

This comes as Florida’s property insurance market struggles to recover after a number of insurance companies fled the state citing the cost of intensifying storms every year during the Atlantic Hurricane Season.

Hurricane Idalia is expected to cost Florida insurers at least $120 million in claims, according to initial estimates based on more than 14,000 claims reported to the Florida Office of Insurance Regulation as of Wednesday afternoon.

Those numbers will continue to rise, as more claims are filed in the coming weeks and could reach into the billions of dollars.

But Idalia’s projected costs are expected to be well below the $60 billion in losses from Hurricane Ian, a category 5 storm which hit the state last summer. The reason Idalia will be less costly, experts say, is that its path mainly affected a low-lying region with no large cities, sparing the Tampa metro area from the worst of the wind and water surge.

However, the fallout from the storm is almost certain to exacerbate the issues facing the state’s property insurance market. A growing number of insurance companies–including Farmers Insurance–have fled the state over the past year year citing the cost of intensifying storms during the Atlantic Hurricane Seasons. 

While many companies have remained in the market, they’ve jacked up their prices. As a result, Floridians now pay the highest homeowners’ insurance rates in the United States, according to the Insurance Information Institute.  The state’s premium average of $6,000 a year for 2023 more than triples the national average of $1,700. In fact, since last year, insurance rates in Florida increased by 42%.

No Break for Consumers

Four new property-casualty insurers—including Orion180 Select Insurance Co., Mainsail Insurance Co., and Tailrow Insurance Co.—have entered the Florida market, but consumers are not expected to see any see relief in the near future. Gov. Ron DeSantis’ close ties to the insurance industry and what some see as his cozy relationship with industry donors have aggravated the situation, according to opponents of the governor’s policies.

These opponents have criticized Florida Republicans’ decision to approve a $2 billion taxpayer-funded reinsurance fund to protect insurance companies from bankruptcy in the event of a cataclysmic event. This was supposed to help lower insurance costs for consumers, yet costs for policyholders rose after the passage of the taxpayer-funded subsidy. 

RELATED: Why It Could Be Harder for Floridians to Rebuild After Hurricane Idalia

“What relief did we actually see? What plan do we have? We have a Legislature that passed every insurance industry wish list reform and also gave them what I call a $2 billion failed bailout,” Broward County House Democrat Hillary Cassel said, speaking in St. Petersburg days before Hurricane Idalia made landfall. “We offered insurance companies $2 billion in reinsurance.”

DeSantis also signed legislation this year to shield insurers from lawsuits and make it much harder for home insurance policyholders to sue their insurers for failing to properly pay out claims. The law also shortened the period of time that homeowners can file claims with their insurers and removed the right of homeowners—who in some cases may be wiped out financially by devastating storms—to recover attorneys’ fees, even in lawsuits they win.

Collectively, critics say these efforts have worsened the home insurance crisis in Florida and left homeowners struggling to find affordable policies and worrying claims won’t be approved.

“Floridians are getting ripped off by property insurance companies. Instead of coming up with a plan to deliver property insurance relief, Ron DeSantis would rather spend his time making up culture wars and traveling across the country to chase the MAGA base,” Florida Democratic Party Chair Nikki Fried said in a statement. 

Idalia Could Make Things Worse

And things could get worse, experts say. They believe that reinsurers may see the insured losses from Idalia as a reason to raise prices yet again, which could lead to Florida property and casualty insurers seeking another round of rate increases for their policies.

Additionally, hundreds of thousands of property owners that lost their private insurance when their property and casualty companies fled the state, are now covered by Citizens Property Insurance, the state-backed carrier. If Florida gets hit with an Ian-level hurricane, Citizens’ $531 billion of exposure means that all of Florida’s insured property owners will be assessed a “hurricane tax” to cover any excess costs.

RELATED: Farmers Insurance Pulls Out of Florida, Leaving 100,000 Homeowners to Scramble for Alternatives

And while Florida dodged a bullet with Idalia, many remain concerned about the next storm to threaten the Sunshine State. 

“This time it didn’t hit in my area. But who knows what will happen next time,” Sergio V. León, a homeowner in Miami who cannot afford storm insurance, told Floricua. “The suspense every year gets tougher.”