What's New
The Senate Budget Committee has raised concerns over the increasing number of home insurance nonrenewals across the U.S., highlighting Florida specifically, where the recent "exodus" of providers has exacerbated the problem.
Why It Matters
Despite recent efforts from the Florida state legislature to stabilize the insurance market, the Sunshine State is still in the midst of a crisis that has left homeowners struggling to find affordable home coverage, if they can find any at all. The state, which is vulnerable to devastating hurricanes and tropical storms, has seen a number of insurers cut coverage in its most vulnerable regions or exit the market entirely in recent years, as the risks are increasingly outgrowing the profits they can make.
This exodus has left Florida homeowners scrambling for options, as they flocked to the state's insurer of last resort or decided to go without coverage entirely—a dangerous option that could end up costing them if a storm hits their homes.
The situation could get worse in the future, as the insurance market has yet to reinvent itself to face the unavoidable risks posed by increasing disaster events.
According to the Senate committee's report, Florida currently has the highest average statewide nonrenewal rate in the entire country. In 2018, the oldest data available in the report, the Sunshine State had a nonrenewal rate of 0.79 percent—far from being the highest in the country, a record held at the time by North Carolina with 2.07 percent.
But by 2023, Florida had climbed to the top of the list, with a 2.99 percent nonrenewal rate. Between 2018 and 2022, the state experienced a 280 percent increase in nonrenewal rates—the biggest change in the nation.
The Senate Budget Committee also found a link between higher nonrenewal rates and higher insurance premiums, which have skyrocketed in Florida in the past few years. Between 2019 and 2023, the average home insurance premiums rose by 60 percent in the state, Reuters reported. In 2024 alone, premiums rose by 7 percent, according to U.S. News & World Report.
What To Know
The Senate Budget Committee launched an investigation into how insurance companies are facing the growing threat posed by climate change on November 1, 2023. The committee asked 41 companies to list the counties where they did not renew 25 or more homeowners policies or, alternatively, where they refused to renew more than 10 percent of such policies between 2018 and 2023.
The results obtained led to the committee's conclusion that homeowners in coastal and high-risk areas in the country are "already in the throes" of a crisis that has seen insurance companies increasingly withdrawing or cutting coverage in the areas most vulnerable to extreme weather events.
What People Are Saying
"Climate change is not just about polar bears and melting icebergs anymore," said Committee Chairman Sheldon Whitehouse, a Democrat from Rhode Island, in a press release.
"It's also about climate-flation bleeding family budgets—with higher costs for insurance, groceries, and health care—and cascading economy-wide shocks," he added.
"What our new data reveal is that the failure to deal with climate change is also affecting whether families can even get homeowners insurance, which threatens their ability to get a mortgage, which spells trouble for property values in climate-exposed communities across the country. If Republicans are serious about staving off such an economic catastrophe, they must take their hands out of Big Oil's pockets and take climate change seriously. Our economy, our country, and our future are on the line."
Newsweek contacted the Insurance Information Institute for comment by email on Thursday.
What's Next
According to the committee's report, states like Florida and California—which has also seen a surge of nonrenewals following devastating wildfires—are only "canaries in the coal mine" which should warn the rest of the U.S. on what's to come for the insurance and property market.
Trouble in the insurance market will spell trouble for the mortgage market as well, the committee wrote, making it "nearly impossible for anyone who cannot buy a house in cash to get a mortgage and buy a home." This, in turn, would cause property values to eventually fall—leaving the country to face a "systemic shock" to its economy which could be even worse than the 2008 crisis.
The committee is urging policymakers to address the current situation to avoid what could be a disaster for the entire country.
Are you a Florida homeowner facing nonrenewal Contact g.carbonaro@newsweek.com to share your story.
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