“I have accumulated 32 years of experience in this industry, and the current trajectory of rate increases is unparalleled. A rate hike below 20 percent is now considered a rare gift,” stated Cindy Zobian, Managing Director at insurance broker Alliant Private Client, in a conversation with Bloomberg. She highlighted that rate increases approaching 800 percent have become the new norm, and this is not an error in reporting.
While it’s important to note that not all Florida residents face identical premium spikes, the numbers remain significantly higher than the historical averages. The average annual property insurance premium in Florida has surged to $6,000, representing a 42 percent increase in just one year, more than three times the national average. The primary drivers behind these escalating costs are hurricanes and flooding, with inflation further exacerbating the situation.
To provide a broader perspective, insurance rates across Florida have tripled over the past three years. Astonishing examples abound, such as a homeowner on Star Island, with a property valued at million, who was recently presented with an astonishing annual quote of $622,000 when seeking new coverage. Another instance involves Chris Rim, a resident of one of Miami Beach’s low-lying man-made islands, who received a bill totaling $98,000.
Oscar Seikaly, CEO at NSI Insurance, emphasized, “Florida was just the beginning; now, with wildfires, floods, and other challenges, this trend is spreading to other regions.”
Wildfires in areas like Aspen and California have also contributed to the escalation of home insurance premiums. In California, major insurers, including Allstate and State Farm, have ceased issuing new policies, citing concerns about wildfire risks and soaring construction costs.
In light of these developments, Mark Friedlander, a director at the Insurance Information Institute, observes, “It’s becoming increasingly clear that only affluent individuals will be able to afford homes in certain coastal communities.” This underscores the growing financial burden associated with insuring properties in high-risk areas.
