Florida homeowners are relocating in droves over insurance crisis (2024)
The skyrocketing cost of home insurance in Florida is causing some residents to sell their properties and relocate, according to a survey by real estate brokerage Redfin and data available on Zillow.
Some 11.9 percent of homeowners in the Sunshine State who told Redfin that they plan to move in the next year said they were doing so because of climbing insurance costs, roughly twice the number of U.S. homeowners who, on the national level, are planning the same (6.2 percent). The survey was commissioned by Redfin and conducted by Qualtrics in February 2024 among 2,995 U.S. homeowners and renters.
The Sunshine State has also got the highest number of motivated sellers in the country on real estate marketplace Zillow, according to data on the platform that Newsweek has previously reported on. Motivated sellers are those open to accept lower offers on their properties compared to the listed price to sell quickly. As of April 24, there were a total of 218,050 properties listed for sale on Zillow in Florida; 5,790 of these were listed by motivated sellers.
Florida's property insurance market is facing an ongoing crisis that has left homeowners struggling with higher premiums and lawmakers in the state scrambling for solutions. Newsweek contacted Redfin for comment by email on Tuesday.
While the main reason behind the crisis can be traced back to the increased risk of extreme weather events, which are being made more frequent and more severe by climate change, there are other factors at play. These include excessive litigation in Florida—a state that accounts for 9 percent of claims nationally, but 78 percent of all litigation—widespread fraud and the climbing cost of reinsurance.
Private insurers have been trying to cut their losses in the state by reducing coverage or refusing to renew policies. Since 2017, 11 companies that offered homeowners insurance in Florida liquidated—five of which did so in 2022. Other insurers are canceling policies or choosing not to renew them, leaving Florida homeowners with fewer options and higher premiums.
The challenges faced by the Florida insurance market are painfully felt by homeowners in the state.
Nearly three-quarters (70.3 percent) of Florida homeowners said they or the area where they live in has been affected by rising home insurance costs or changes in coverage in the past year. This was a much higher number than what was reported at the national level, where less than half of U.S. homeowners (44.6 percent) said they had been affected by insurance changes or had seen premiums climb.
It was even higher than in California (51 percent), though the Golden State is also facing its own insurance housing crisis as providers back out from fire-prone areas and limit their coverage.
Some 12 percent of Florida homeowners surveyed by Redfin who have faced insurance changes said they have been dropped by their insurance company, against 8.3 percent of respondents overall. Some 27.7 percent said they are or have been concerned that their insurer will stop offering coverage for their home in the future.
"Homeowners living in areas where insurance premiums are surging are at risk of seeing their properties gain less value than homeowners in areas with stable premiums—and in some cases, they may even lose money," Redfin chief economist Daryl Fairweather said in a statement. "Homes with low disaster risk and low insurance costs will likely become increasingly popular, and thus more valuable, as the dangers of climate change intensify."
Update 04/24/24 at 9:30 a.m. ET: This article was updated to add more information on the number of motivated sellers in Florida.
Some 11.9 percent of homeowners in the Sunshine State who told Redfin that they plan to move in the next year said they were doing so because of climbing insurance costs, roughly twice the number of U.S. homeowners who, on the national level, are planning the same (6.2 percent).
– One in three Floridians who get dropped by their homeowner's insurance company have moved or plan to move somewhere else. It's new data that was just released by the real estate brokerage firm Redfin, but according to Florida's Chief Financial Officer, there are ways struggling families can save money.
Florida's insurance crisis is the result of several factors, including hurricanes and litigation, that have caused home insurance companies to pull back, leave the state or eve go out of business. Homeowners in Florida face some of the highest home insurance rates in the nation, with dwindling coverage options.
In May 2022, during Special Session 2022-D (SB 2-D), the Legislature reestablished the My Safe Florida Home Program to provide financial incentives for property owners to obtain free home inspections which identify mitigation measures and provide grants, reducing vulnerability to hurricane damage and helping decrease ...
Three primary factors are driving the insurance challenge. First, natural disasters are becoming more common and costly. Second, the price of reinsurance is skyrocketing. And finally, Florida's litigation-friendly environment compounds the issue by making it easy for customers to sue their insurers.
They got soaring costs and a culture war. Florida has seen a population boom in recent years, but many longtime residents and recent transplants say rising costs and divisive politics have them fleeing the Sunshine State.
In 2024, apparently, it's all about the Carolinas — their coast, their mountains, their more temperate climate and — most importantly — their affordable cost of living, say the moving pros at PODS, who've analyzed heaps of customer data to identify the latest trends.
WASHINGTON, D.C. (NewsNation) — Days after a major insurance provider announced it was pulling out of Florida due to environmental risks, State Farm Insurance announced Thursday it is recommitting itself to the residents of the state, NewsNation has learned.
Effective Date: July 1, 2024 with some provisions effective on May 13, 2024, the day Governor DeSantis signed the bill. Allows surplus lines insurance companies that meet certain financial requirements to take out policies from Citizens for dwellings that are not primary residences or homestead properties.
Getting full roof replacements covered by insurance is more difficult. In May 2022, Florida's 25% Roof Replacement Rule was eliminated and replaced with Senate Bill 4-D. The law originally stated that if more than 25% of the roof was damaged, the entire roof would need to be replaced to meet code requirements.
Home insurance in Florida is expensive and only increasing, especially in coastal areas with the highest hurricane risk. The average cost of homeowners insurance in Florida is $4,419 a year for a policy with a 2% hurricane deductible and $2,401 without the hurricane deductible.
“The states with the highest home insurance costs are prone to severe weather events,” the Insurify report explains. “Florida, Louisiana, Texas, Arkansas and Mississippi are vulnerable to hurricanes. Texas, Colorado and Nebraska face a growing wildfire risk.
But as storms become more frequent and intense, an increasing number of homes are becoming uninsurable by private insurers, pushing homeowners towards Citizens. Neptune Flood CEO Trevor Burgess (pictured) told Insurance Business that long-term policy changes would be necessary to solve Florida's insurability crisis.
In simple terms, insurance companies are leaving Florida because it's best for their bottom line. When an insurance company is paying out more in claims than it's taking in, they run the risk of not being able to pay out any claims at all.
A combination of inflation, natural disasters, and lower competition is to blame. Homeowners can shop around with different insurers and consider raising their deductibles to save money on policy costs.
The Miami Herald reported in late 2023 that the Insurance Information Institute estimates 13% of homeowners in Florida are foregoing homeowners insurance coverage. This is much higher than the national average of 7% going without coverage.
By clicking on SIGN ME UP, you agree to Newsweek's Terms of Use & Privacy Policy. You may unsubscribe at any time. According to 2023 data from the Insurance Information Institute (Triple-I), between 15 and 20 percent of Florida homeowners had no property insurance as of last summer.
Florida and California have seen a mass exodus of insurance companies, but they are not the only states insurance companies are pulling out of. Homeowners in Massachusetts, Louisiana, Colorado, Minnesota, Arkansas, Nebraska and Oklahoma may also struggle to find a policy.
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