Florida Is Having an Insurance Crisis — Could It Happen Elsewhere?

Rising insurance premiums caused by climate disasters have disrupted real estate markets across the country.

Miami Florida Skyline from palm trees
Updated July 18, 2024
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Homeownership can already be expensive enough, but one cost is rising — and may get even worse.

Driven by recent climate disasters, insurance premiums are rising astronomically across many states, significantly impacting residential and commercial real estate markets and, in some cases, even causing deals to fall apart due to high costs and limited insurance availability.

Some coastal states, like Florida, have been affected the most, but the varying impacts across the country are shifting the competitiveness of the real estate market and leaving many property owners at risk of losing their insurance coverage.

Read on for more about the challenges — and to learn if you’re at risk. Plus, find out more smart money moves you can make as a homeowner. 

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Widespread insurance crisis

fizkes/Adobe senior couple signing health insurance contract

The insurance crisis has led to skyrocketing premiums and carriers leaving coastal states like Florida and California. This situation is spreading, fundamentally altering real estate markets nationwide.

Impact on real estate deals

hedgehog94/Adobe realtor giving house keys to couple

The inability to secure affordable insurance is causing real estate deals to collapse. Bill Baldwin, a Houston realty owner, notes that insurance companies are imposing nearly impossible demands, leading to failed transactions.

Mounting insurance losses

Satoshi Kina/Adobe hurricane Irma and tropical storm at Fort Lauderdale Florida

Insurance companies themselves are grappling with substantial losses from natural disasters, with nearly $80 billion in insured losses last year. Climate risk is key, driving insurers to hike rates, shed risks, or limit new business.

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Regional challenges

Nancy Pauwels/Adobe neighborhood in Anaheim Orange County California

Due to recent hurricanes, Florida policyholders face premiums nearly five times the national average. California's insurance market is shrinking, and Louisiana homeowners are paying triple the national average, highlighting regional disparities.

The impact on corporate hiring

wolterke/Adobe amazon corporation

High insurance rates are even affecting the labor market, as they complicate site selection and affect recruiting and hiring processes for big companies. This factor is even now part of CNBC’s 2024 America's Top States for Business study, considering regional premium increases and living costs.

Bottom line

LIGHTFIELD STUDIOS/Adobe male realtor standing outside house hanging sold sign

The impending insurance crisis, driven by climate disasters, is reshaping the real estate landscape and increasing homeowners' costs. While some experts hope for stabilization by 2025, states are taking various measures to address the issue. 

Meanwhile, if you’re buying a home, real estate pros advise clients to secure insurance early in navigating this challenging environment.

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Author Details

Laura Ratliff

Laura Ratliff is a writer and editor based in New York. Her writing expertise spans numerous topics, including insurance, travel, food and drink, and reported pieces covering political and human rights issues. She has previously worked at Architectural Digest, Bloomberg News, and Condé Nast Traveler.