As extreme weather events increase its risk, it could leave parts of Florida uninsured in the future, a new report shows.
What happened?
Florida insiders report that a study that modeled Sunshine State climate risks found that household insurance premiums in Fort Myers Beach have soared over the past five years. Interest rates rose from an annual cost of $9,000 in 2019 to $14,000 in 2024. This situation is equally unsustainable as premiums have increased by 30% since 2021.
“Over the past few decades, we have not measured climate risk adequately in risk modeling. We are currently catching up, which has quickly increased insurance prices and individuals are feeling the impact on the family budget.”
As more Floridians price their homeowners’ insurance, the state is forced to take on a share of the increased burden. Furthermore, this has had a knock on the value of the property and hinders investment in the area. Wall Street Magazine describes the idyllic coastal city coral as “the worst housing market in America.”
Why are rising insurance rates so concerned?
The global temperature rise caused by human activity is driving extreme weather events that make Florida almost impossible to insure. Higher ocean temperatures and sea level rise are creating ideal conditions for more frequent and devastating hurricanes. For example, Hurricane Ian caused several deaths in 2022 and caused more than $122 billion in property damage and prompted one million insurance claims.
Florida is far from the only state, and competition is a sharp rise in insurance costs due to increased risk from climate-induced insurance companies. Areas prone to wildfires have risen sharply, and some insurance companies have simply withdrawn from states altogether.
How to mitigate the risk of extreme weather events?
The new reality requires some rethinking of real estate in Florida and other high-risk areas. Revisions to building regulations, such as Japan’s seismic design, to make the house more resilient to hurricanes, would be a good start.
It also requires increased public awareness of inherent risks and solutions. More sustainable building materials can make it easier to rebuild after disasters and reduce the massive pollution footprint in the construction industry.
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