GOM - Gulf Coast residents grapple with home insurers as climate disasters worsen
As climate disasters grow more costly, insurers aren't paying policies.
When Harry and Jen Appel lost their home in Big Pine Key, Florida, to Hurricane Irma in 2017, they thought their insurance policies would cover the cost to repair and they'd rebuild in the same location.
The couple showed ABC News' meteorologist Rob Marciano the spot where their home used to be, now an empty lot covered in sea lavender and some shards of their former life.
"If we would have got paid by insurance the right amount of money, it would have been a you would have been standing in a new house," Harry Appel said. "Insurance was tough — that was worse than a storm."
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In September 2017, Hurricane Irma barrelled across the Atlantic with winds reaching 185 miles per hour — the strongest hurricane ever recorded in the Atlantic Ocean, according to the National Oceanic and Atmospheric Administration.
The Category 4 storm ravaged the Appel's dream home, along with much of the region, leaving those hit hardest by the storm to contend with an insurance market already struggling to cover its claims.
Since moving into their home in Big Pine Key in 2015, the Appels paid into premium homeowner insurance policies — the National Flood Insurance Program provided by the Federal Emergency Management Agency.
"A week afterward, the guy came up from Texas — the underwriter for flood insurance for FEMA — and he came up and he looked at the house and for him to write a check on the spot for this entire policy, which was amazing. And at that point, I really felt better," Harry Appel said.
Harry Appel told ABC News that FEMA paid out the $110,000 flood policy, but when the private insurance company responsible for the Appels' wind coverage came to assess the damage, they claimed the damage had only been done by flooding, so the company wasn't liable.
"We were entitled to this money," Jen Appel said. "This was a contractual obligation that they did not live up to and it should have been paid."
Home insurance isn't mandatory by law, but banks often require homeowners to get insurance as a condition of a mortgage.
"The insurer's goal is to collect more in premiums than they pay out in claims," said Ben Keys, University of Pennsylvania Wharton School of Business professor of real estate and finance. "We're seeing higher costs of materials, higher costs of labor, and those are growing faster than inflation."
In recent decades, the intensity of some hurricanes has exploded, fueled by the warming seas, according to experts.
MORE: Hurricane Ian could cripple Florida's home insurance industry
"We're having more disasters, we're having more costly disasters, and importantly, more people live in harm's way," Keys said. "So any individual disaster now leads to more payouts coming from the insurers — and they're recognizing that these costs are rising quickly, not just because of inflation, and they're reacting accordingly."
2023 marked the most "billion dollar disasters" on record for the United States, with 25 climate-related disasters, according to NOAA.