Experts raise red flags as soaring home insurance costs impact some communities more than others: 'It isn't looking good'

New analysis has revealed that Florida's insurance crisis is hitting poorer inland communities harder than initially realized, and extreme weather is just one factor to blame.   

What's happening?

Inside Climate News analyzed data released in December by the Senate Budget Committee on the and made a surprising discovery: Insurance non-renewal rates in Florida are highest "where climate-related hazards are compounded by poverty and other factors that make it harder to withstand and recover from extreme weather events."

While wealthier coastal counties like Miami-Dade, Monroe, Lee, and Broward also saw some non-renewal notices from insurers, rural counties with fewer assets were most heavily impacted, even though they don't take the most direct impact of landfalling storms.

Glades County, the state's poorest county with a median household income of less than $39,000 per year, saw the largest number of non-renewals. 

Why is this important?

Extreme weather supercharged by a warming climate isn't the only factor causing insurance rates to rise and an uptick in non-renewal notices. Mark Friedlander, spokesman for the Insurance Information Institute, pointed to that reality when referencing the Senate Budget Committee's climate-focused report, per ICN.

Regardless, it is a significant factor at play, with the number of billion-dollar weather disasters worldwide reaching a record high in the U.S. in 2023. Insurers are raising premiums to help offset the financial risk of providing coverage or pulling out of vulnerable areas altogether.

For Florida residents like Steve Cates, whose mortgage requires him to have insurance, a non-renewal notice could mean a loss of housing and security.

"What I really don't understand is how they can drop so many people around the lake and not down on the coasts," Cates, who lives north of Lake Okeechobee, told ICN.

Along with Glades, the inland counties of Hendry, Highlands, and Okeechobee had the highest non-renewal rates.

"I'm just sitting here, and I don't know which way to go. It's unstable times for me right now," Cates added. 

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What's being done to support inland Florida residents?

While poorer counties like Lake Okeechobee generally experience lower premium increases than wealthier coastal communities, residents often seek out smaller local insurers if their insurer slaps them with a rate hike. That's because they have lower coverage to start, according to Ishita Sen, an assistant professor of business administration at Harvard Business School, per ICN.

If they can't find a private company willing to provide them with coverage, they may forgo coverage if their mortgage allows it or else end up insured by Citizens Property Insurance Corp., Florida's state-sponsored insurer of last resort.

However, Citizens has tried to incentivize private insurers to take over its policies through its depopulation program, leaving many homeowners in a precarious financial position.

Those who remain on Citizens may also find themselves in a bind when the next major storm hits. A Citizens spokesperson told ICN that "Citizens can never go broke," as Florida law allows it to recoup funds by adding surcharges on premiums paid off by all homeowners in the state.

Nonetheless, Sen underscored that it would be difficult for residents relying on Citizens to quickly recover, telling ICN: "If there is a big hurricane, Citizens is not going to be able to make those payments. It isn't looking good."

While there isn't a quick fix to the insurance crisis, you can start working toward a brighter future by educating yourself about critical climate issues and taking steps to incorporate eco-friendly, cost-effective practices into your lifestyle. This includes reducing dirty fuel pollution that is primarily driving global temperatures higher and fueling extreme weather.

Doing this can be as simple as unplugging appliances when they are not in use and using energy-efficient LED light bulbs at home.

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