FOX - WOFL Orlando - More Floridians Ditching Property Insurance

Published Date: 01/17/2024

The Rising Cost of Risk: Why More Floridians Are Ditching Home Insurance — and Why It’s a Dangerous Gamble

Florida is once again at the center of a property insurance crisis. But this time, the story isn’t just about insurers leaving the state — it’s about homeowners leaving insurance altogether.

In a recent FOX 35 Orlando segment, reporter Amy Caulfield revealed that a growing number of Floridians are choosing to drop their home insurance entirely because they simply can’t afford it anymore.
As one resident said, “It went up massively in one year.”

That decision — born of financial pressure — has raised alarms among regulators and insurance experts, who warn that the short-term savings could come at devastating long-term costs.

1. The Cost of Living the “Sunshine State Dream”

Owning a home in Florida has always carried certain risks. Hurricanes, floods, sinkholes, and rising sea levels all make property insurance both essential and expensive.

But in 2024, the cost has reached a tipping point.

According to data cited by FOX 35, Florida now leads the nation in homeowners dropping insurance coverage. Between 15% and 20% of Florida homeowners are now uninsured — well above the national average of 12%.

The reason? Price.

Florida’s average homeowners insurance premium has climbed to around $6,000 per year, a 42% increase from 2022. That makes it the highest in the nation — and for many, unsustainable.

“The question for some homeowners isn’t ‘What policy should I get?’” Caulfield said. “It’s ‘Should I get insurance at all?’”

When middle-class families are forced to choose between insurance and other basic costs, the financial logic can feel inescapable. But experts warn that it’s also a sign of a broken system.

2. Why Premiums Are Skyrocketing

To understand why Floridians are dropping coverage, you first have to understand why premiums have doubled in just a few years.

A. Climate and Catastrophe Risk

Florida faces more severe weather events than any other U.S. state — from hurricanes to inland flooding. Insurers price those risks into their models, and as catastrophic events grow more frequent and costly, so do premiums.

B. Reinsurance Inflation

Insurers must buy reinsurance — insurance for insurance companies — to cover their own catastrophic losses. Global reinsurance costs have doubled or tripled since 2020, largely due to climate-driven disasters worldwide.

When reinsurers raise their prices, those costs get passed directly to consumers.

C. Litigation and Fraud

For years, Florida has struggled with high levels of insurance litigation and contractor fraud, especially in roof claims. Lawsuits, legal fees, and inflated repair costs have pushed multiple insurers into insolvency, reducing competition.

D. Insurer Exodus

As FOX 35 noted, “There is a major exodus from Florida from insurance carriers. And when we have fewer carriers writing, we’re going to have the few that are left charging higher premiums.”

With fewer insurers in the market, homeowners have fewer choices — and less pricing pressure to keep rates reasonable.

3. Who Can Afford to Go Without Insurance?

The short answer: only those who own their homes outright.

As the report explained, “The only way to self-insure is by not having a mortgage.” Lenders require homeowners to carry insurance to protect their investment — typically including fire, wind, and sometimes flood coverage.

But for retirees and cash buyers who own their homes free and clear, the choice is technically available. Unfortunately, that freedom comes with enormous risk.

“If something happens, you are stuck paying for the repairs,” the report emphasized.

Given Florida’s exposure to hurricanes and flooding, one storm could wipe out decades of savings. And even smaller events — like a burst pipe or kitchen fire — can cost tens or hundreds of thousands of dollars to fix.

4. A False Sense of Savings

For many who’ve dropped insurance, the decision is framed as a financial strategy — “figuring the savings are worth the risk.”

But those savings can vanish overnight.

Imagine saving $5,000 a year for three years by going uninsured. Then, a hurricane damages your roof, causing $50,000 in structural and water damage. That’s ten years of insurance savings lost in one night, with no recovery options.

And the risks don’t stop at hurricanes. Florida’s geography and humidity create year-round threats — from mold and water intrusion to lightning strikes and wind damage.

Even if a homeowner avoids catastrophe, going uninsured can complicate future sales, limit financing options, and make it nearly impossible to re-enter the insurance market later.

5. Expert Advice: Don’t Go Uninsured

Insurance professionals in Florida are nearly unanimous in their warning: Don’t drop coverage.

“Please, whatever it takes, do not go uninsured,” one expert told FOX 35. “I get it — it’s nutty and expensive. But if you do want to save money, find other ways to do it.”

Those “other ways” include practical steps like:

• Raising your deductible to lower premiums.
• Bundling policies (home and auto) for multi-policy discounts.
• Investing in mitigation measures, such as impact-resistant roofing, hurricane shutters, or improved drainage systems.
• Working with independent brokers who can shop multiple carriers rather than relying on one company.

Florida’s My Safe Florida Home program even offers grants for homeowners making storm-hardening improvements — upgrades that can both lower risk and reduce premiums.

6. A Crisis Beyond Affordability

While the affordability crisis is grabbing headlines, the bigger issue may be market stability.

When too many homeowners go uninsured, the ripple effects can destabilize entire communities. Uninsured losses after a major hurricane can delay recovery, suppress property values, and strain local economies.

It also puts pressure on Florida’s Citizens Property Insurance Corporation, the state-backed insurer of last resort, which already holds more than 1.3 million policies. If more private carriers leave and more homeowners go bare, Citizens could face insolvency after a major event — forcing taxpayers to absorb the losses.

This dynamic is similar to what’s unfolding in California’s FAIR Plan, where rising enrollment is threatening the plan’s long-term solvency. In both states, regulators are facing a tough question: how to make insurance both sustainable and affordable in an era of climate volatility.

7. Florida’s Reform Efforts

To its credit, Florida has been attempting to fix the problem. In late 2022 and 2023, the state legislature passed sweeping insurance reforms aimed at curbing litigation abuse, stabilizing the reinsurance market, and encouraging new insurers to enter the state.

Early results show modest progress — fewer lawsuits, fewer insolvencies — but rates have not yet come down. As one insurance analyst put it, “The bleeding has stopped, but the patient is still in critical condition.”

Until competition increases and risk modeling catches up to reality, Floridians will likely continue to face steep premiums.

8. The Real Question: Can People Afford to Stay?

The emotional toll of the crisis was summed up by one resident interviewed by FOX:

“Can I afford to live here?”

For many long-time Floridians, the question isn’t rhetorical. Between insurance, property taxes, and rising repair costs, the price of homeownership in the Sunshine State is testing the limits of what middle-class families can bear.

That’s why experts stress that insurance reform is about more than economics — it’s about maintaining the very fabric of Florida’s communities. When families can no longer afford to protect their homes, the entire housing ecosystem is at risk.

Final Thoughts

The surge of Floridians dropping property insurance is a symptom of a deeper problem — a market struggling to adapt to rising risk and outdated structures. While self-insuring might seem like a short-term solution, it exposes homeowners to devastating financial loss.

The takeaway is clear: insurance isn’t optional in a state where nature routinely tests the limits of resilience.

Reform, competition, and transparency are essential to restore balance — but in the meantime, experts say one thing above all:

“Don’t gamble with your home. Protect it, even if it costs more than it should.”