LAST UPDATED: January 14, 2025
For Canadian snowbirds who own property in Florida, the rising cost of home insurance in the state has become a growing concern.
Over the past few years, and certainly since Hurricane Ian passed over the Gulf Coast of Florida in 2022, the home insurance landscape in Florida has been in crisis with several large insurers leaving the state, others folding their tent and still others refusing to insure properties near water and flood plains – resulting in the cost of home insurance rising dramatically in some areas.
However, according to Insurance broker Tommy Kochis of Atlas Insurance in Sarasota, the landscape has been changing and improving recently. More home insurance companies are coming back to Florida - as well as new ones, the laws have changed - which has stabilized things, and premium prices are even coming down for some properties
To help snowbirds better understand the state of homeowners insurance in Florida today, Snowbird Advisor asked Kochis several questions. Some of his answers may surprise you!
Q: There is a lot of talk about the home insurance crisis in Florida. What are you hearing?
A: There will always be talk about the home insurance crisis in Florida. This has been an ongoing discussion since Hurricane Andrew, and will most likely be a discussion forever, as Florida is unique in that it is surrounded by water on three sides and hurricanes threaten this peninsula annually.
Q: What are the reasons for the homeowners insurance crisis in Florida?
A: The crisis started after Andrew and has never fully recovered, as there have been some periods of stability and other periods of chaos (Post Andrew and Charley). The crisis started when many of the national/gegional insurance carriers exited the marketplace after Andrew, leaving a void in choice and competition for the consumers. The hurricane activity in this period after Andrew started to pick up as Florida had years of multiple storms and significant losses for insurance carriers, causing many to dissolve or exit the market.
Just when the insurance industry had the hurricane pricing models figured out in 2016 and we began to see strength in the carriers and a decrease in pricing, the industry experienced two setbacks: 1) an onslaught of litigation from the assignment of benefits - where homeowners assign a third-party to act on their behalf to collect claims from insurance companies, and 2) widespread fraudulent roof claims - where roofing companies made false insurance claims, claiming that roofs were damaged when in fact they were not. This resulted in large, unexpected losses for the industry.
The insurance industry must make a profit in the years that hurricanes do not have a direct impact. These lawsuits and fraudulent claims caused carriers to lose money in years that they needed to make a profit, so we began to see carriers once again exit and premiums increase.
To add fuel to the fire, Ian hit the state causing the largest loss in state history, as some estimates have losses higher than Andrew.
Fast forward to 2025 and once again the state had two major events on the coastline. However, these storms seem to be more manageable for the industry than Ian.
Q: Why are insurance companies pulling out of Florida?
A: The market has actually stabilized in late 2024. We have seen new carriers enter the marketplace, existing carriers begin to write new policies, and rates stabilize, as reinsurance capacity and pricing have stabilized and new laws have taken effect.
Q: What is happening to home insurance rates in Florida?
A: Rates are beginning to stabilize and will increasingly be determined in the future by the specific characteristics of individual properties. For example, newer construction that provides more protection against hurricane damage is going to see better insurance coverage terms and pricing. We are even starting to see rates come down for some properties.
Q: Are there regions of Florida where you cannot get home insurance?
A: Coastal properties are always going to be challenging for insurance carriers, who will focus on the age of the roof, structure, and other damage mitigation features in place to determine premiums and coverage availability.
Q: What is the state-backed Citizens Insurance program?
A: Citizens was designed to be the insurer of last resort when there were no other options available to obtain insurance. The program was designed for those properties which insurance carriers deemed unacceptable. The carrier is governed by a board of directors, which is appointed by the state and mandated by the legislature. All rates and coverage must be approved by the board and its governing body.
Q: What is the Citizen’s Takeout program?
A: The takeout program is an incentive program for private insurers aimed at reducing the number of policies issued by Citizens by incentivizing more private insurers to issue policies to homeowners, as the goal is to have Citizens as the marketplace of last resort where only properties that do not qualify for the private insurance market are placed with Citizens. This is currently expanding as more carriers enter the marketplace.
Q: Is the Citizens Insurance program available to non-permanent residents in Florida and non-US citizens?
A: Yes, this program is available as a market of “last resort” and there is a surcharge for properties that are not primary residences. The surcharge applies to residents of the U.S. and non-residents of the U.S. wherever they come from, if the home is not occupied on a primary basis.
Q: What advice do you have for Canadian snowbirds who own property in Florida regarding home insurance?
A: Stay educated and informed, as the marketplace changes frequently. Review your policy annually with your insurance broker to make sure you understand any changes and products available in the marketplace. Finally, long-term planning is key - have your home upgraded to the newest building code for wind as this will drive rates in the future.
