ORLANDO, Fla. — Florida’s homeowners’ insurance market was already mid-collapse when Hurricane Ian hit.
Six weeks and one more hurricane later, the outlook got worse when Nicole made landfall.
June 1 marks the start of the 2023 Hurricane Season, and there are deep concerns that if another hurricane hits, the situation will be worse than in 2022 for property insurance.
In the hours before Hurricane Nicole hit, homeowners who were almost flooded out six weeks earlier by Hurricane Ian prepared for the worst.
“It seems late on the year to be having another hurricane,” a Central Florida homeowner said before Nicole made landfall.
That hurricane, Nicole, would hit Florida with 75 mph winds, storm surge, and heavy rain.
Thomas Cotton, the owner of Hugh Cotton Insurance in Orlando, explained the impact of Hurricane Ian on the insurance market.
“Certainly, Ian was a devastating blow to an already imperiled homeowners insurance market, " he said.
What Hurricane Nicole delivered was mainly flood damage, not wind.
A distinction that means the brunt of Nicole’s damage fell under federal flood insurance, not private homeowners insurance
“This is a flood claim homeowners care,” Cotton said. “They are not going to be paying out hundreds of millions of dollars for this claim like they had for Ian.”
Even still, the back-to-back storms took a market teetering on collapse and pushed it even further, with carriers doing the only thing they can, pass the costs along.
Jeff Brandes, Former State Senator, said the system has failed on rates.
“The containment system has failed on rates, and rates are going through the roof,” he said. “They are all justified rate increases, especially Hurricane Ian and what is going on in the reinsurance space.”
Brandes spent years calling on Florida to fix the system, but lawmakers were slow to act, eventually holding two special sessions in 2022 after a half dozen carriers became insolvent.
Meanwhile, state-backed citizens’ property insurance has more than 1.2 million policies, while homeowners on private insurance stare at double-digit rate hikes or worse.
Ashley Haering is an Orlando resident; she bought her house in 2021 and said finding insurance coverage for her property was not easy.
“I was actually afraid for a moment that I wasn’t going to be able to find coverage at all,” she said.
Haering’s house has a new roof, yet she knows all too well what could happen when it’s time for insurance renewal.
“That’s always in the back of my mind-- am I going to be dropped?” she said. " Is my rate going to increase dramatically to the point where it makes it more difficult to afford it?”
Tasha Carter is Florida’s Insurance Consumer Advocate at the state Department of Financial Services, one of the state agencies that oversee insurance. She said a reduction in rates wouldn’t happen anytime soon.
“We may not see a reduction in rates for about 18 to 24 months,” she said. “For consumers, that’s just a long time to wait for financial relief.”
Carter noted even the state-backed citizens’ property insurance has had to ask for a 14% increase, 2% more than its state cap.
Lawmakers, who have dumped billions into reinsurance while significantly limiting homeowners’ litigation options, had promised that private carriers would return to the state.
So far, the number of new private carriers is one.
Right now, Florida homeowners pay about six thousand dollars a year for insurance, almost four times the national average.
One of the main problems is that almost all large nationwide carriers have pulled out of the state, leaving small carriers with fewer resources.
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