ChatGPT said: Hurricane risk in Florida is intensifying—and securing home insurance is becoming increasingly difficult

Hurricane season no longer comes as a surprise in Florida. But the economic toll it leaves behind is taking new and more permanent forms—especially in the insurance market. For many Floridians, the biggest storm isn’t what hits the coastline—it’s what arrives in the mailbox: a home insurance renewal notice with a five-digit premium.

This is the new reality in Florida, where climate risk and financial fragility are colliding in ways that insurance markets can no longer absorb quietly. Premiums are rising faster than wages. Insurers are pulling back or going bankrupt. And homeowners are left to navigate a shrinking pool of options that cost more and cover less

In Fort Myers Beach, Dayna and Matt Fancher have lived in their home for nearly 30 years. But when Hurricane Ian struck in 2022, it wasn’t just the storm that upended their lives—it was the aftermath. Their insurance provider paid only a third of what it would cost to rebuild. The couple is now in court fighting for a fair payout, all while paying double the previous premium to maintain their current policy.

“We have the same coverage that we had, we’re paying double, and we didn’t get the assistance that we needed,” Matt Fancher told reporters. The sentiment is growing common across Florida: residents are paying more for less protection, and they’re still being left to shoulder most of the rebuilding burden themselves.

Florida now has the highest average home insurance premiums in the United States, clocking in near $10,000 a year. That figure can soar higher in vulnerable coastal towns like Fort Myers Beach, where premiums have jumped from around $9,000 in 2019 to nearly $14,000 in 2024.

The reason? A mix of repeated storm damage, higher claims, and fewer insurers willing to underwrite homes in hurricane-prone zones. Since 2021, Florida has endured four major hurricanes—Ian, Helene, Idalia, and Milton. Each new storm increases the actuarial risk models insurers use, making coverage more expensive and harder to obtain.

At the same time, insurance payouts aren’t keeping pace. In the wake of Hurricane Ian, Florida residents filed more than 500,000 residential claims. Estimated losses ranged between $50 and $65 billion. As insurers struggled to cover the damage, several regional firms went under, and larger national carriers like Farmers began pulling out of the state entirely.

With private insurers retrenching, many Floridians are turning to Citizens Property Insurance Corp.—the state-backed “insurer of last resort.” While this has temporarily expanded access to coverage, it has also raised concerns about systemic risk. Citizens wasn’t built to become the default option for hundreds of thousands of households. Its growing share of the market suggests a policy solution stepping into the role of a failing market mechanism.

And with greater participation comes greater exposure. Citizens is funded in part by surcharges on other Florida insurance policyholders—meaning that a catastrophic loss affecting its policy base could ripple out across the entire state, increasing premiums for everyone.

One reason this crisis is accelerating: the physics of climate change are catching up with the economics of risk. Warmer sea temperatures in the Gulf of Mexico now provide more energy for storms to intensify rapidly. Higher atmospheric moisture levels increase rainfall during hurricanes, worsening flood damage even in non-coastal areas.

During Hurricane Helene, extreme rainfall reached 27 inches in parts of Florida. According to climate risk modeling firm First Street Foundation, the storm’s intensification was made worse by warming-driven atmospheric moisture, which increased rainfall by an estimated 10%.

In short: hurricanes are getting wetter, faster, and more destructive. The insurance industry can no longer price that volatility as an edge-case risk. It has become central to their cost model—and it’s being passed on to homeowners in the form of higher premiums and reduced willingness to cover exposed areas.

Insurers aren’t just looking at flood zones and historical claims. They’re also watching real estate markets—and what they’re seeing is unsettling. In hard-hit areas like Fort Myers Beach and Sanibel Island, home prices have dropped sharply. Zillow data shows that average home values on Sanibel fell from $1.3 million before Ian to $868,000 today. In both towns, more than 85% of homes are selling below list price.

When values fall, insurers get nervous. They interpret declining home prices in climate-vulnerable areas as a signal of growing physical and market risk. That translates into tighter underwriting and even higher premiums—creating a feedback loop that leaves homeowners trapped. They can’t sell without taking a loss. They can’t insure affordably. And they often can’t afford to rebuild after damage without incurring debt.

The consequences of this spiral are profound—not just for individual families, but for local economies. Rebuilding delays can reduce municipal tax revenue. Depopulation risks emerge as younger families seek more affordable, stable regions. And the rising burden of litigation between homeowners and insurers adds pressure to Florida’s legal system, driving up systemic costs for all.

Meanwhile, climate experts warn that what’s happening in Florida today may soon happen elsewhere. In California, homeowners are already grappling with rising wildfire risk and insurance exits. In Louisiana, insurers are raising premiums and pulling back from coastal zones. According to First Street Foundation, insurance premiums in Sacramento could rise by 137% due to wildfire exposure by 2055, while the Tampa metro area may face a 213% increase due to hurricanes.

To its credit, Florida’s legislature has passed reforms aimed at stabilizing the insurance market. In 2024, the state saw the smallest average increase in home insurance premiums nationwide, and more than a dozen new insurers entered the market. Industry groups point to this as evidence of recovery.

But it’s more accurate to say the market has been given a reprieve, not a cure. Legislative fixes cannot undo the physical reality of intensifying storms. Nor can they compel insurers to underwrite risk that they deem unaffordable without premium hikes. The underlying crisis—climate volatility colliding with financial fragility—remains unresolved.

For Floridians, the question isn’t just whether they can insure their homes this year—it’s whether their long-term financial plans can absorb this new form of risk. That means:

• Treating home insurance not as a passive default, but as a key variable in real estate investment planning
• Building liquidity buffers for post-disaster scenarios, since insurance payouts may lag or underdeliver
• Considering geographic diversification of assets to hedge against climate concentration
• Recognizing that taxpayer-backed insurance backstops like Citizens may not be sustainable over decades

Even those who plan to “ride it out” should reevaluate what climate resilience looks like. As one longtime resident, Joanne Klempner, put it: “When you don’t have a hurricane for 30 years, the risk feels worth it. When you have three bad hurricanes in 18 months, it becomes questionable.”

The Florida home insurance crisis is not simply a cost problem. It is a reflection of how the climate is reshaping what it means to own, protect, and rebuild a home. Premiums aren’t just a price tag. They’re a signal—one that’s telling us, loudly, that yesterday’s assumptions about risk no longer apply.

Homeowners must now plan accordingly—not for the next storm, but for a new financial era in which protection is conditional, location matters more than ever, and the real risk isn’t just weather—it’s being unprepared when the system says no.