HomeHome InsuranceFlorida's Uninsured Masses Face Prospect of Financial Ruin

Florida’s Uninsured Masses Face Prospect of Financial Ruin


As Idalia is expected to make landfall in Florida early morning on Wednesday as a Category 4 hurricane, experts warned that it may cause damage into the tens of billions and hit the most vulnerable areas with the lowest insurance rates.

While saving lives in Florida is currently the priority for officials, as Hurricane Idalia is expected to bring “life-threatening” winds and storm surge inundation, according to the National Hurricane Center (NHC), the topic of insurance has been a crucial part of the debate around its impact on the state.

Florida is experiencing an ongoing home insurance crisis, with residents of the state paying four times more than the national home insurance rate in the country.

The increased cost of home insurance has made protecting their homes unaffordable for many Floridians, at the same time as major insurers decided to drop out of the state because of the growing risk of extreme weather events in the state, linked to climate change.

Hurricane Idalia
A vehicle drives through flood waters caused by Hurricane Idalia, on August 30, 2023, in St. Petersburg, Florida. The Category 4 hurricane could cause damage to the state’s most vulnerable areas.
Joe Raedle/Getty Images

Florida Senator Rick Scott warned on Tuesday that the hurricane is “a wake-up call” for the state’s home insurance sector.

“If you look at what’s happened with the property insurance rate…it’s devastating to people if they see their property insurance [going up] or [if] the rent goes up because the property insurance of the landlord goes up,” Scott said on CNN. “We need to figure out how do we get insurance companies to come back in and how do we work with them to get rates down.”

“It’s way too expensive to insure homes in Florida right now…Everything you’re doing, until it’s completely solved, you know there’s more to do,” he added when asked about whether enough was being done to solve the issue.

Based on the current NHC forecasts, the insured loss caused by the storm will reach the low single-digit billions, according to a report on the potential impact of Hurricane Idalia in Florida written by Gallagher Re, a reinsurance broker.

The overall economic loss caused by the extreme weather event, on the other end, could be “into the high single-digit billions (USD), if not higher.”

If Idalia were to unexpectedly shift further south or east closer to the Tampa metro area, the company writes, “then the insured loss potential would be considerably higher and likely into the tens of billions (USD).”

The company expects the hurricane to drive the cost of claims “higher than typically expected” and aggravate the situation of Floridians moving to Citizens Insurance—the state-run insurance programs considered something of a last resort coverage for those unable to get affordable private insurance.

As of June 30, there were 1.32 million active policies in place tied to Citizens, said Gallagher Re.

“In terms of Citizens’ exposure in relation to Idalia, the current NHC track…would bring the storm into an area with some of the fewest policies in force and the lowest insured exposure,” the broker said.

By comparison, Hurricane Ian, which made landfall as a Category 4 storm in September 2022, caused up to $65 billion in insured losses and $17 billion in uninsured losses, according to reinsurance company Swiss Re.

Republican Governor Ron DeSantis, who has previously been blamed for not doing enough to stabilize the state’s insurance market, was the target of criticism on social media as Hurricane Idalia threatens Florida.

Newsweek reached out to DeSantis’ spokesperson via email for comment on Wednesday.

“As we here in Florida prepare for Hurricane Idalia, here is your annual reminder that one of Ron DeSantis’s first official acts as Congressman was voting against flood insurance aid to Hurricane Sandy victims,” lawyer and former candidate for Florida attorney general, Daniel Uhlfelder, wrote on X, formerly Twitter.

Uhlfelder said in a previous post on X that “DeSantis voted against [a] bill to provide $9.7 billion in flood insurance aid for Hurricane Sandy victims. The bill passed the House on a 354-67 vote. It passed the Senate unanimously by voice vote.”





Source link

latest articles

explore more