Florida homeowners face third straight year of 20% premium rises as insurers retreat from the coast

The average cost of insuring a home in Florida has risen to $6,900 a year, more than three times the national figure, after a third consecutive year of increases above 20%, according to data published on Monday by the state's Office of Insurance Regulation.

The figures cover the 12 months to September and show that 14 private insurers withdrew from the state or stopped writing new coastal policies during the period, while Citizens Property Insurance, the state-backed insurer of last resort, grew to 1.1 million policies. Citizens was created in 2002 to cover homes that no private company would take; it is now the largest insurer in Florida by a wide margin.

In Lee County, which was struck by Hurricane Ian in 2022 and by two smaller storms since, the average premium is $11,200. In parts of the Florida Keys it exceeds $20,000. “My mortgage is $1,400 a month and my insurance is $1,100. Two years ago it was $480,” said Lourdes Fernández, a school administrator in Fort Myers. “We are not rich people. We bought a three-bedroom house in 2016. We are now paying for the ocean to be where it is.”

Greg Thornton, an independent broker in Naples who has sold property insurance for 31 years, said he now spent most of his days telling clients what they could not have. “I used to have 14 carriers who would write a house on a canal. I have three, and two of them want a new roof and shutters before they quote,” he said. “Citizens is not supposed to be anyone's first choice. For half my book it is the only choice.”

The state has tried several remedies. Legislation in 2022 and 2023 limited lawsuits against insurers, which the industry blamed for a third of its losses, and created a $2bn reinsurance fund. Insurers say the reforms have stabilised the market: eight new companies have been licensed since 2024 and Citizens has moved 400,000 policies to private carriers. But the premiums charged by the newcomers are not lower.

“The litigation was real, and fixing it was necessary, but it was never the main problem,” said Dr Alicia Kemp, who studies catastrophe risk at the University of Florida. “The main problem is that the cost of reinsurance, the insurance that insurers buy, has roughly doubled since 2020 because the global reinsurers have looked at the Gulf coast and repriced it. That is not a Florida policy decision. That is physics, as the market sees it.”

The strain is beginning to show in the property market. Sales in coastal counties fell 9% in the year to September and the inventory of unsold homes is at its highest since 2011. Surveys by the state's estate agents' association find that a third of sellers cite insurance costs as their main reason for leaving.

Citizens has said that if a storm of the size of Ian struck Miami rather than Fort Myers, it would need to levy a surcharge on every insurance policy in the state, including car and business cover, to pay its claims. The surcharge can by law reach 45%.