And as insurers assess the impact of the storm and assess future risks as extreme weather events become more common, coverage could become even further out of reach for Floridians.
Tracker: where Ian struck and where it goes next
“Obviously, this is going to be a multi-billion dollar storm, and with the insurance industry already crumbling, this is going to be devastating,” said Republican Senator Jeff Brandes.
A Fitch Ratings analysis on Thursday estimated that insured cost losses in the state could be between $25 billion and $40 billion.
A unique set of factors makes Florida an extremely difficult place for private insurers to do business, and for homeowners to find affordable comprehensive plans from private companies. As Ian has shown, the state is prone to dangerous weather events, something that is likely to increase over time as a result of climate change. Insurance companies’ risk models, which contain thousands of years of weather data, have proven unreliable when it comes to the most recent storms, said Danielle Lombardo, president of the Global Real Estate Practice at Lockton, an independent insurance brokerage and consulting firm.
“It’s the most risky piece of land in the world for insurers from a catastrophe point of view,” Lombardo said.
Hurricane Ian: Live Updates
Lawmakers and industry officials said Ian could condemn private homeowners insurers unless state legislatures intervene, while consumer advocates said residents would face being priced out of the market entirely.
According to Mark Friedlander, director of corporate communications for the Insurance Information Institute, an industry nonprofit research and communications organization, more than 400,000 Florida consumers have already lost coverage this year due to insurer failures or policy increases.
Some consumers “are already in a position to try to find new coverage, and they simply aren’t able to find an insurance company to unsubscribe,” said Florida insurance company Tasha Carter. consumer advocate.
Florida’s insurance litigation laws tend to favor claimants, according to industry officials and independent experts, so insurance companies are constantly faced with a barrage of lawsuits. According to the state’s Office of Insurance Regulation, Florida accounted for 76 percent of all homeowner lawsuits nationwide by 2021.
Meanwhile, the state’s population has continued to grow, driving more demand even as risk-averse insurers try to exit the market, leading to less supply. All this leads to higher rates for consumers.
Governor Ron DeSantis (R) called a special session in May to address the property insurance crisis, but many say the bill he signed is doing nothing to help consumers now. And some elements of the law, such as My Safe Florida Home, which should provide grants to homeowners who retrofit their homes to add hurricane protection, are still not operational four months later.
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In an interview on the Weather Channel this week, DeSantis said the goal was to avoid litigation over harm and heal people as quickly as possible.
“The goal is to get these claims as quickly as possible. So it’s basically using the government to get everyone in line, and let’s get the people back on their feet,” DeSantis said.
Florida residents rely on a state-established nonprofit that is often referred to as the “insurer of last resort” – Citizens Property Insurance Corporation of Florida. Citizens will insure people who can’t find private insurance, and their rates are capped at 10 percent a year — leaving them lower than some private insurers who have astronomically raised rates.
Citizen demand has grown exponentially in recent years, with 1.1 million insured, doubling from two years ago, spokesman Michael Peltier said. But there’s a catch: The legislature required citizens to operate without government funding, so when a major disaster strikes and claims pour in, it charges fees of up to 45 percent on its policyholders.
“The real costs of a citizen’s policy can rise dramatically after a major disaster,” notes the company itself in its literature.
Citizens face about 20,000 lawsuits, Peltier said.