Makatla Ritchter wades through flood waters after having to evacuate her home when the flood waters from Hurricane Idalia inundated it on August 30, 2023 in Tarpon Springs, Florida. (Joe Raedle/Getty Images) (Getty Images)

FL - Why Florida's home insurance crisis matters

Climate change is making millions of homes across the country difficult or impossible to insure

Earlier this year, Chicago native Steve Swanson decided to move full-time to Sanibel Island, Fla., where he had vacationed as a child. A boomerang-shaped barrier island in the Gulf of Mexico, Sanibel was devastated by Hurricane Ian last year, but Swanson did something that would have been unthinkable anywhere in the country a few years ago: He purchased a small house but declined to purchase homeowner’s insurance, which would reimburse him in case of another disaster.

“You self-insure,” Swanson said in an interview with Yahoo News, describing how he adds each month to a rainy-day fund against natural disasters instead of paying a premium to an insurance company. “And then you just hope that it never happens.”

Swanson’s experience is becoming increasingly common. He landed on the frontline of a budding home insurance crisis that has hit coastal and inland states alike. Insurance companies are pulling out of states where evermore frequent natural disasters mean those companies have to pay out large claims after a home is destroyed in a wildfire, leveled by a mudslide or wrecked by a flood,

“I never thought I would see in my lifetime houses that are flat-out uninsurable,” insurance broker Robb Lanham told Axios over the summer.

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Research has shown that rising ocean temperatures are causing hurricanes to gain strength more quickly, and to dump more rain than they did in the past. When those hurricanes destroy homes, insurance companies pay for the damage. To cover those expenses, they raise premiums.

Thanks to mounting hurricane losses, home insurance premiums in Florida have risen an astonishing 300% in the last five years, according to the financial news site Benzinga. Residents there now pay an average of $4,200 per year for home insurance, more than double the national average of $1,700, a stark increase that could lead to the reversal of torrid population growth that has made Florida the third-most-populous state in the country.

The soaring rates in Florida reflect how frequently the state is battered by devastating storms. “No other state has reported sustained losses for property insurers like Florida has since its last profitable year in 2016,” Mark Friedlander, spokesman for the insurance lobby group Insurance Information Institute, recently told the New York Times.

A destroyed house is seen in Keaton Beach, Florida in August after Hurricane Idalia made landfall. (Chandan Khanna/AFP via Getty Images)
A destroyed house is seen in Keaton Beach, Florida in August after Hurricane Idalia made landfall. (Chandan Khanna/AFP via Getty Images) (AFP via Getty Images)

Florida is hardly alone. Climate change makes wildfires more likely in states like California. Flooding is also exacerbated by climate change — not only in low-lying coastal states like Louisiana, but also in parts of the Midwest. Kentucky and West Virginia are among the several states particularly vulnerable to landslides.

“It’s a global problem,” insurance expert Lara Mowery recently told the Associated Press.

In all, the United States saw 23 weather-related disasters in 2023 that each caused more than $1 billion of damage.

According to the First Street Foundation, which studies climate risk, 35.6 million homes across the country could see their insurance policies become more expensive, or disappear entirely, as insurers flee high-risk states. “That is crippling. Absolutely crippling,” First Street CEO Matthew Eby told CBS News. “And so those homes are not, from an investment scenario, something that you would invest in.”

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