‘This is the sum of all fears’: Florida’s homeowner’s insurance market faces post-hurricane crisis

TALLAHASSEE, Fla. — There was one thing lawmakers hoped for when they went back to Tallahassee in May to try and fix the state’s collapsing homeowner’s insurance market: no hurricanes.


Now, less than a week after Hurricane Ian made landfall, the worst-case scenario for the state is playing out.

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“This is the sum of all fears,” says State Senator Jeff Brandes (R-Pinellas). “This is the year that Florida needed to go without a storm, our property insurance companies in the state have lost a billion dollars in the last three years, and we’re likely to lose a billion dollars this year.”

Brandes, who has been a leading voice for homeowner’s insurance reform, points to the six insurers who have gone into liquidation this year, with the sixth coming the weekend before Ian made landfall.

“It is as bad as I have ever seen it in Florida,” says Brandes.

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Before the storm, Florida homeowners were already paying almost three times as much for insurance as the national average. Additionally, Citizens Property Insurance, the state-backed insurer of last resort, has seen its portfolio swell to more than one million policies this year.

“The Florida property insurance market, particularly the homeowner’s insurance market was already past the tipping point,” says Thomas Cotton of Orlando-based Hugh Cotton Insurance. “This is absolutely a worst-case scenario for all citizen in Florida, because whether you have a Citizens policy or a private-market policy, you’re going to be paying for this.”

But taxpayers are already paying. In May lawmakers set aside $2 billion for reinsurance to try and hold down costs, they have also left in place legislation that allows Citizens Property Insurance to charge a special assessment to policyholders if it can’t pay off all of its Hurricane Ian claims.

Against this backdrop some lawmakers have called for a November special session to take up insurance reform, again. Brandes, who is up against term limits, recommends the state address two main factors: litigation costs and make Citizen’s policies actuarily sound.

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Florida is home to an estimated 80% of all property insurance litigation. Lawmakers could target assignment of benefits and one-way attorney’s fees to try and drive down litigation costs.

As for Citizen’s Property Insurance, the state-backed insurer, Brandes says its rates need to be set with the market, not through politicians, noting that Citizens’ rates are below the market making it what he calls a “predatory competitor” in the market.

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