NEW ORLEANS (WVUE) – As Floridians recover from hurricanes Milton and Helene, they’re also grappling with skyrocketing insurance premiums.
“The average home insurance price in Florida is over $11,000 a year,” said Chris Schafer, a senior editor at Insurify who focuses on home insurance.
Florida, like Louisiana, is facing an insurance crisis.
“To put it in perspective, Louisiana averages about $6,500 a year, which is the second highest. So, there’s really nobody in Florida’s ballpark when you talk about home insurance prices,” Schafer added.
When asked if insurers have adapted enough by incorporating drone technology and increasing staff to respond to back-to-back hurricanes, Schafer was skeptical.
“I think all of that has helped, but I wouldn’t say they’ve caught up. What’s really interesting is that nobody has a great solution for this. And it’s not just the hurricanes in Louisiana and Florida. In California, they’re dealing with wildfires, and we’ve seen State Farm pulling out of the state, avoiding a lot of policies,” he explained.
Veteran insurance agent Dan Burghardt believes the recent hurricanes along the Gulf Coast will impact both the insurance crisis and premiums.
“It’s going to go up. All our efforts to lower rates depend on Mother Nature. We can change regulations, but rates will ultimately be influenced by the strength of the hurricane and the damage it causes. The reinsurance market is definitely going to take a hit, so we’re going to see rate increases,” Burghardt said.
Schafer also expects the recent storms to exacerbate the insurance crisis.
“I think it could definitely worsen things. We’ve already seen several small state-based insurers in Florida go insolvent because they just can’t afford to do business anymore. Even large national insurers are facing significant risk,” he said.
Burghardt is keeping a close eye on how insurers with policies in both Florida and Louisiana fare in the aftermath of Milton and Helene.
“We’re watching the companies we work with that do business in Florida. We feel comfortable for now, but you just don’t know how things will end up with the number of claims. Hopefully, they’re solvent and have enough reinsurance. That’s key,” Burghardt noted.
Schafer believes insurers are doing their best to respond to the damage caused by two major hurricanes in quick succession.
“I think they’re doing what they can. It’s an interesting situation. Helene hit hard, but Milton, by many accounts, wasn’t as severe as people feared,” he said.
Schafer also pointed out that a growing number of homeowners in Florida and Louisiana are relying on their state’s insurer of last resort.
“In Florida, Citizens is now the number one property insurer in the state, and that was never supposed to happen. There’s a push in Florida, and soon in Louisiana, to move people back into the private market. The Citizens plan wasn’t designed to handle this many policies,” Schafer said.
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