Florida Home Insurance Crisis Explained: Spring 2025 Update

The Home Buying Institute has created a helpful resource for home buyers and homeowners who have questions about the ongoing home insurance crisis in Florida.

This guide explains how this situation evolved and where it might be headed, while providing information, tips, and resources for current and future homeowners.

Quick Summary: Insurance Crisis at a Glance

Here are the five most important points covered in this guide:

• High Costs & Limited Options: Florida homeowners face some of the highest insurance premiums in the nation. Finding coverage can be a challenge because many private insurance companies have limited their business or withdrawn from the state.
• Multiple Driving Factors: This situation stems from a combination of factors rather than just one, but weather and climate top the list. Driving factors include frequent and severe hurricanes, high reinsurance costs (insurance for insurers), rising construction and repair costs, and recent costly lawsuits related to property claims.
• Growth & Shrinking of Citizens: Many homeowners were forced into the state-created “insurer of last resort,” Citizens Property Insurance. This caused its policy count to surge, peaking at over 1.4 million. However, state efforts to move policies back to the private market (“depopulation”) have recently reduced Citizens’ coverage volume.
• Major Legislative Reforms: Florida lawmakers passed major reforms in 2022 and 2023. They’re designed to reduce lawsuits, provide reinsurance support, attract new insurers, and make Citizens’ rates less competitive to encourage private market growth.
• Signs of Stabilization: As of early 2025, there are positive developments in the home insurance market. New insurers are entering the market again. Rate increases have slowed dramatically, with some companies filing for decreases or no change. But insurance premiums remain high for many homeowners as the market recovers. Long-term stability will depend on the above-mentioned reforms and future storm seasons.

That’s an overview of Florida’s home insurance crisis. Now, let’s take a deeper dive to find out how we got into this situation and what homeowners can do about it.

1. Florida’s Home Insurance Crisis: An Overview

Florida is currently facing a significant home insurance crisis that’s affecting both homeowners and potential buyers across the state.

In simple terms, this means it has become a lot harder to find affordable and comprehensive homeowners insurance in the Sunshine State.

Many private insurance companies have reduced their business in Florida, stopped writing new policies, or even left the state entirely. As a result, homeowners now have fewer options.

This situation has forced many homeowners to pay much higher premiums than just a few years ago, sometimes multiple times higher. It also makes it harder to buy or sell a home, since mortgage lenders typically require insurance coverage.

For some Florida homeowners, the only option is the state-created insurer of last resort, Citizens Property Insurance Corporation, which has seen its policy count surge.

The rest of this guide explains the multiple causes for this problem, the current status as of spring 2025, and the options and resources available to homeowners.

2. Why It’s Happening: Factors Driving the Crisis

The challenges in Florida’s home insurance market didn’t appear overnight. The trouble has been brewing for quite some time and boiled over in 2020. 

Here are some of the interconnected factors that contributed to the problem:

Hurricane Frequency and Severity

Florida’s geography makes it uniquely vulnerable to hurricanes. Major storms like Andrew (1992), the multiple storms of 2004-2005, Irma (2017), Michael (2018), and Ian (2022) caused billions of dollars in insured losses. Increased storm activity, partly driven by climate change, raises the risk profile for home insurance companies.

Litigation and Fraud

For many years, Florida experienced excessive property-related lawsuits compared to other states. Issues included Assignment of Benefits (AOB) abuse, where contractors inflated claims, and aggressive tactics by some legal firms. This greatly increased costs for insurance companies. While recent laws aim to curb this, the effects of past litigation linger on.

Soaring Reinsurance Costs

To cover catastrophic losses like those associated with hurricanes, home insurance companies often purchase their own insurance coverage. This is called reinsurance. Global reinsurance rates have increased dramatically due to large-scale disasters worldwide and other factors. These higher costs are passed down to Florida homeowners through premiums.

Inflation and Construction Costs

The cost of labor and building materials has risen sharply in recent years due to inflation and supply chain issues. So when damage occurs, it can cost insurers a lot more to repair or rebuild homes. This in turn leads them to charge higher premiums to cover potential claims.

3. How Did We Get Here? A Brief History

Florida’s insurance market has faced challenges before. But the current situation has unique characteristics. Here are some factors that have contributed to the problem.

• Post-Hurricane Andrew (1992): Hurricane Andrew devastated South Florida and caused many national insurers to leave or drastically reduce their presence. This led to the creation of state-backed entities (precursors to Citizens) to provide coverage.
• Mid-2000s Storms: A series of hurricanes in 2004 and 2005 further strained the market. Citizens’ policy count grew significantly during this period.
• Relative Calm & Rising Litigation: A period without major hurricane landfalls followed. But underlying issues like rising litigation costs began to fester, particularly after Hurricane Irma in 2017. Insurers started reporting substantial financial losses even without catastrophic storm seasons.
• Recent Escalation (Late 2010s – Present): Insurer failures, company withdrawals, and double-digit rate increases became common in Florida. Factors like litigation, fraud, and rising reinsurance costs combined with major storms like Ian pushed the market toward its current critical state. Legislative reforms were enacted starting in late 2021/early 2022 to address these issues, but the market takes time to react.

4. Current Insurance Landscape in Florida (2025)

In 2025, the Florida home insurance market remains challenging for homeowners. But there are some early signs of stabilization, partly due to recent legislative reforms.

Here’s what the current landscape looks like:

• Limited Providers: Many traditional insurers have reduced their presence in Florida. Homeowners in high-risk areas are facing fewer options for coverage.
• Insurer Cautiousness: Insurance companies remain cautious about writing new policies, especially in high-risk coastal areas and with older homes.
• New Players: Some new, smaller insurers have entered the market in Florida. But their long-term stability is still being tested.
• Rising Premiums: For those who still have access to policies, premiums have increased significantly. Insurers are recalculating risk factors and property owners are paying for it.
• Assigned Risk Pools: Across Florida, state-backed programs and assigned risk pools have expanded. These options help provide coverage when the private market fails, but they often come with higher premiums and limited coverage.
• Citizens Property Insurance: Citizens remains a major player in the Florida home insurance market, with nearly one million policies. State officials want Citizens to be the “insurer of last resort,” not a competitor to private companies. But it still represents a large portion of the market.
• Impact of Reforms: Reform efforts designed to reduce litigation are beginning to have an effect, with fewer lawsuits being filed. But the insurance companies say it will take more time for these changes to fully translate into broad premium reductions.

5. Alternatives to Traditional Coverage

Florida homeowners who need coverage should explore all of their options, including these alternatives to traditional home insurance.

• State-Run Insurance Programs: Programs like the Florida Citizens Property Insurance Corporation have expanded to cover those who cannot get traditional coverage. These programs act as a safety net but may offer limited benefits.
• Assigned Risk Pools: These pools are available in many states to serve high-risk markets. In Florida, they are increasingly becoming the default for homeowners in high-risk areas.
• Non-Traditional Insurers: Some companies specialize in high-risk policies. While they often charge a premium for the added risk, they can provide coverage when the mainstream market does not.
• Risk Sharing and Catastrophe Bonds: Insurers and governments are testing new ways to spread the cost of major disasters. These tools can offer homeowners some coverage, but often come with higher costs or more limits than traditional insurance.

6. Risk Mitigation and Preparedness

Here are some steps Florida homeowners can take to reduce risk and insurance costs.

Shop Around and Compare

Don’t assume your renewal is the best option. Contact an independent insurance agent who works with multiple companies. They understand the Florida market and can compare quotes from admitted carriers (state-regulated) and surplus lines carriers.

Invest in Home Hardening & Wind Mitigation

Home hardening is crucial and well worth the effort, especially in high-risk / storm-prone areas. Investing in a stronger roof, impact-resistant windows and doors, storm shutters, and secure garage doors can significantly reduce potential hurricane damage.

Homeowners in these areas should also consider getting a certified wind mitigation inspection. Depending on which insurer you use, documented improvements could lead to substantial discounts on your premium.

Research Citizens Property Insurance

Florida homeowners who cannot find comparable private coverage within 20% of the Citizens Property Insurance premium might be eligible for their program.

Just know that Citizens policies can have stricter coverage limitations compared to plans from private insurers. Review policy details carefully to see what is and isn’t covered, along with the maximum payout amounts.

Also be aware that Citizens’ rates are legally required to increase annually by a set percentage until they reach levels comparable to, or higher than, the private market. This state policy is designed to prevent Citizens from competing with private insurers and to encourage homeowners to find private coverage when available.

Homeowners considering Citizens also need to understand the “depopulation” process. This is where approved private insurance companies review Citizens policies and make offers to take them over.

If you receive such an offer from a private insurer, and their quoted premium is not more than 20% higher than what your Citizens renewal premium would be, Florida law generally requires you to accept the private policy and leave Citizens.

Review Coverage and Deductibles

Understand what your homeowners policy covers and its limits. Choosing a higher deductible (the amount you pay out-of-pocket before insurance kicks in) can lower your premium. Just make sure you can afford the deductible if you need to file a claim. Be cautious about reducing coverage limits too much.

If You’re Non-Renewed…

Don’t panic, but act quickly. Your insurer must give you advance notice (typically 120 days in Florida) that they will not be offering you a renewal when your current policy term ends. This notice period is intended to give you time to find new insurance coverage.

Use this time proactively. Immediately start shopping for replacement coverage with an independent agent. Determine why you were non-renewed. If it was due to the home’s condition (such as an old roof), you might be able to fix the problem and find new coverage.

7. The Future of Home Insurance in Florida

It’s hard to predict how Florida’s home insurance predicament will play out over the next few years and beyond. There are too many variables involved.

Here are some possible scenarios based on the current picture:

Gradual Stabilization

If recent reforms prove effective, litigation remains lower, and Florida avoids catastrophic hurricane seasons for a few years, the market could slowly stabilize.

In this scenario, insurance premiums might level off or even slightly decrease in some areas, and more private insurers could regain confidence to enter the market.

Continued Strain

A major hurricane or a resurgence in litigation could set back recovery efforts, leading to continued high costs and limited availability. The impacts of climate change on storm frequency and severity remain a long-term uncertainty. This is the hardest thing to predict.

Ongoing Role for Citizens

While the government’s goal is to shrink Citizens, the insurer of last-resort will continue to play a significant role in the short term. Homeowners with properties that are harder to insure will continue to rely on Citizens, especially if private market recovery is slow.

Focus on Mitigation

There will likely be an increasing emphasis from both insurers and the state on homeowners investing in mitigation measures to reduce vulnerability and potential losses.

8. Frequently Asked Questions (FAQ)

Below, we have compiled some of the most frequently asked questions Florida homeowners have regarding the home insurance crisis and how they fit into it. Some of these questions have been answered previously but are presented here for your convenience.

Q: Why are insurers leaving Florida?

Insurers are facing mounting losses from severe weather events, the rising cost of claims, and the increased risk of lawsuits. These factors have made the Florida market less profitable (and often more damaging) for home insurance companies.

Q: What is an assigned risk pool?

An assigned risk pool is a program that offers insurance when traditional providers are unwilling to issue a policy due to high risk. It offers a fallback option for homeowners but often comes with higher costs.

Q: How can I lower my homeowners insurance premium?

Improvements such as hurricane-proofing your home and installing safety features could reduce your risk score, resulting in lower premiums. Bundling policies could also help lower costs. “Bundling” is when you purchase two or more policies from the same insurance provider (like home and auto).

Q: What is Citizens Property Insurance?

Citizens is Florida’s state-run insurance company. It offers home insurance if you can’t find coverage from private companies. It’s often referred to as the “insurer of last resort.”

Q: How do I qualify for Citizens?

You might qualify for Citizens coverage if you can’t get insurance through the private market, or if their prices are more than 20% higher than Citizens’. These rules can change over time, so check the Citizens website or ask an agent for current details.

Q: My insurance wasn’t renewed. What should I do?

Start shopping for a new policy right away. Call independent insurance agents (who often work with several companies). Have your home’s details ready. If you can’t find private insurance, check if you qualify for Citizens.

Q: What’s the simplest way to shop for a policy?

Use an independent insurance agent. They understand the challenges of the Florida market. They also work with many companies, including special high-risk insurers, which can make it easier to find and compare coverage options.

Q: What’s a hurricane deductible?

It’s what you pay out-of-pocket just for hurricane damage, separate from your regular deductible. It’s usually a percentage (like 2% or 5%) of your home’s insured value, often much higher than your normal deductible. The good news is you’ll probably only pay it once per year.

Q: Does home insurance cover floods?

No, standard home insurance doesn’t cover flood damage (from rising water or storm surge). You must buy a separate flood insurance policy. Florida homeowners should check to see if they need this extra protection, based on the flood risk in their local area.

Q: What’s a wind mitigation inspection?

It’s an inspection that checks for features that might help protect your home from strong winds. Such features include roof shapes, special clips, impact windows, special shutters, and more. Getting this official inspection report could help you qualify for insurance discounts.

Q: How does this situation affect home buyers and sellers?

High costs and trouble getting insurance can make it harder to buy or sell a home in Florida. Buyers might struggle to get the insurance needed to qualify for a mortgage, which could prevent a sale from happening.

What Should We Add to This Page?

Our goal is to make this guide the most useful destination for Florida home buyers and homeowners who are seeking information about the insurance crisis.

But we need your help to make that a reality.

If there’s something you didn’t find on this page that might make it more useful, please let us know. You can email the editor directly at editor@homebuyinginstitute.com.

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Disclaimers: This guide is for general informational purposes and may not apply to all situations. It does not constitute financial, legal, or insurance advice. Readers should consult with a licensed professional for specific guidance. Information was accurate at the time of writing but may change over time.