Insuring The Worst, Ensuring The Worst, Con't

Just as State Farm stopped writing new homeowners' insurance policies in California, Farmers Insurance will no longer write new policies in Florida.

We are almost two weeks into hurricane season. That means now is the time to make sure your property insurance is taken care of.

But we're learning there is just one less option in the Florida market.

"Over the past 18 months in Florida, we've had 15 companies decide to stop writing new business," Mark Friedlander, the Insurance Information Institute's spokesperson, said.

The Insurance Information Institute's Mark Friedlander says Florida homeowners in search of new coverage have fewer and fewer options, as companies put a pause on new property policies.

That now includes Farmers Insurance Group, who said in a statement:

"With catastrophe costs at historically high levels and reconstruction costs continuing to climb, we implemented a pause on writing new homeowners policies to more effectively manage our risk exposure," Friedlander said.

Even when your insurance bill may be more expensive than ever, Friedlander says insurance companies are now worried they won't profit if they have to pay out on claims.

nd their chances of doing so in Florida are much higher than in many other states.

"The cost of claims for catastrophes is higher than ever before. And we saw this here in Florida play out last year, with Hurricane Ian, we estimate it to be a $60 billion insured loss event," Friedlander said.

The Insurance Information Institute says the replacement cost for homes has increased 55% over three years, outpacing inflation.

But the skyrocketing costs for consumers are real too.

"Floridians are paying more on average for home insurance today, versus the US average homeowner which is paying about $1,700. So $6,000 in Florida, versus $1,700 in U.S., on average, almost four times as much," Friedlander said.

 

To be fair, Florida's insurance market has all but collapsed, with double-digit rate hikes across the state. You can blame Ron DeSantis and the Florida GOP for that, but you also have to blame climate change and the fact that living in Florida will be unsustainable for most people within my lifetime, and certainly within the lifetimes of those born after 2000.

Again, America has no real plan to deal with the fact that most coastal areas, flood plains, and wildfire regions will be devastated within the next few decades, with as much as half the US population having to relocate. Not everyone will be able to, and we're not even beginning to have this conversation or the fact the cost will be in the trillions.

As it is, these some of these areas will be totally uninsurable by the end of the decade. The US government will have to step in, and the cost will be astronomical.

It does not get better from here.