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AI Overview

Insurance companies have indeed been withdrawing from Florida or limiting their coverage due to the increasing risks associated with climate change, particularly hurricanes and other extreme weather events.

Several factors contribute to this trend:

Increased Frequency and Severity of Natural Disasters: Florida's susceptibility to hurricanes and tropical storms, which are becoming more frequent and intense due to climate change, leads to substantial property damage and increased insurance claims.

Skyrocketing Costs: The costs of repairing homes, rebuilding communities, and addressing lawsuits related to insurance claims have surged. Material and labor shortages drive up rebuilding expenses, and litigation adds financial pressure to the system.

Insurers Limiting Exposure and Withdrawals: Faced with mounting losses, insurers have opted to reduce their exposure in high-risk areas, either by not renewing policies, tightening underwriting guidelines, or completely pulling out of the Florida market.

Impact on homeowners
Higher Premiums: Homeowners are facing significantly higher insurance premiums, making Florida one of the most expensive states for homeowners insurance.
Limited Options: With private insurers leaving or reducing coverage, homeowners have fewer options to secure affordable and comprehensive policies.

Reliance on State-Backed Programs: Many homeowners are forced to turn to Citizens Property Insurance Corporation, Florida's state-backed insurer of last resort, which has seen a surge in policyholders. While it provides coverage, it may come with higher costs or less comprehensive coverage than private market policies.

Recent developments
While some companies have left, other private insurers have entered the market in the last couple of years.

The number of policies with Citizens dipped below 1 million in October 2025, suggesting a potential increase in commercial companies willing to take the risk.
Reforms passed in 2022 and 2023 aim to stabilize the market by addressing issues like frivolous lawsuits and improving building codes.

Florida has also introduced a state-backed reinsurance program to support insurers during catastrophic events.

Despite these efforts, the Florida insurance market remains challenging, with high costs and evolving risks due to the continued impact of climate change on extreme weather events.
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