Since 2017, 11 home insurance companies in Florida have gone out of business amid more severe natural disasters and higher-than-expected claim payouts. To add to the already complex situation, several larger — and by all indications financially stable — insurance companies have recently pulled back coverage or have made the decision to exit the state altogether, citing higher catastrophe costs, increased risk exposure, and skyrocketing construction costs due to inflation.
While Florida still has plenty of viable home insurance options, many companies have tightened their eligibility requirements in recent years — often requiring homes to have newer roofs and few signs of wear and tear — which has made it increasingly difficult for homeowners to get approved for coverage.
For those who already have coverage, you’re likely paying more for it than you’d prefer. From May 2022 to May 2023, home insurance premiums in Florida increased by an average of 35% at renewal, according to the 2023 Policygenius Home Insurance Pricing Report.
Here’s a rundown of the various issues that led to the insurance crisis in Florida, as well as what you can do if your policy is canceled, nonrenewed, or if you’re facing a large rate increase at renewal.
What led to Florida’s homeowners insurance crisis?
From increasingly severe natural disasters to systemic insurance fraud to inflation and climate change, here’s a breakdown of some of the issues that have Florida’s home insurance market on the brink of collapse.
More severe hurricanes
Hurricanes have always come with territory in Florida thanks to its shape and geography. But these storms have become increasingly catastrophic in recent years, in large part because of higher ocean temps and rising sea levels created by climate change.
Since 2017, two of the six costliest hurricanes in history have hit Florida, including Hurricane Ian. The 2022 hurricane caused around $50 billion in insured losses, as well as between $10 and $17 billion in uninsured flood losses. 
With losses continuing to go up and profit margins getting thinner by the day due to more extreme weather, it’s not unusual for Florida insurers to see their claim reserves get completely depleted after a major storm. Such was the case in 2022 after Hurricane Ian, which drove several companies into financial insolvency. 
Inflation & higher reconstruction costs
Residential construction costs are up roughly 34% since March 2020 due to ongoing supply chain issues and labor shortages, further complicating matters for Florida homeowners and insurance companies.
Higher rebuild costs have driven up the insured value of commercial and residential properties, which has led to higher average claim payouts and reduced profit margins. Supply chain slowdowns and labor shortages have essentially increased the amount of time it takes to make repairs or rebuild a home, which has driven up costs and caused insurance companies to pocket those additional losses.
Insurers are regularly filing double-digit rate increases
To help pay for the record losses from recent years, Florida insurers are consistently requesting double-digit rate increases each year with the Florida Office of Insurance Regulation (FLOIR), which is the entity that’s responsible for approving or denying insurance cost hikes. 
As a result, home insurance premiums in Florida are increasing faster than any other state. On average, premiums in Florida are up 35% compared to a year ago, according to our most recent home insurance pricing analysis. And when looking at policy premiums over the two years from May 2021 to May 2023, we found that home insurance rates in Florida were up an average of 68%.
In addition to more catastrophic weather, Florida carriers have also lost a significant amount of money from lawsuits stemming from fraudulent roof repair claims, which has led many insurers to increase premiums even more. In 2021, there were over 116,000 lawsuits filed against home insurance companies in Florida due to these claims.
“Floridians are seeing homeowners insurance become costly and more scarce because for years the state has been the home of too much litigation and too many fraudulent roof replacement schemes, ” says Sean Kevelighan, CEO of the Insurance Information Institute.
What homeowners can do if their policy is canceled or nonrenewed
If your home insurance is canceled or nonrenewed, contact your insurance agent immediately to find out the reason and see if there are any circumstances under which your policy could be reinstated. If their reason is related to your home’s increased exposure or risk, ask what specifically caused your exposure to increase and inquire about whether there are any upgrades you could make to your property or additional steps you could take to keep your coverage.
If your home is in an area of Florida with a high risk of hurricanes, taking steps to fortify or retrofit your home to prevent expensive wind damage could make your property significantly more insurable.
Here are some different ways to hurricane-proof your home:
Have a waterproof or wind-resistant roof installed
Consider impact-resistant garage doors, windows, and doors
Make sure your home is fitted with roof-wall attachments that use double wraps
If you’re not sure where to begin, contact a wind mitigation inspector for an assessment.
How Florida homeowners can reduce their home insurance premiums
While home insurance rates in Florida are skyrocketing, there are several different ways to get your costs down to a reasonable level.
Compare quotes from multiple companies. At least once a year, set aside some time to compare home insurance rates from at least three companies to ensure you aren't missing out on a better deal with a different provider.
Bundle your home & auto insurance. One of the most effective ways to lower insurance costs is to bundle home and auto insurance. When you purchase your home and auto policies through the same company, you can save as much as 30% each year.
Take advantage of the My Safe Florida Home program. The My Safe Florida Home program is designed to help homeowners keep their home safe from hurricane damage by providing free inspections and home improvement consultations. Eligible homeowners who live in participating areas of Florida can then apply for grants to get their homes retrofitted with these improvements to lessen the risk of hurricane damage and save on premiums.
Raise your deductible. Opting for a higher deductible can help you pay lower premiums each month. Just make sure you have enough in savings to cover the higher out-of-pocket costs.
Don’t file small claims. Since your claims history directly impacts the cost of your home insurance, avoid filing a claim for smaller incidents that wouldn’t cost you too much to just pay yourself out of pocket.
Learn more >> Home insurance discounts & savings