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Florida Property Insurance Crisis: What Buyers Must Know in 2025-2026
Florida property insurance crisis buyer guide: 6+ insurance companies became insolvent 2020-2024; multiple national carriers (Farmers, others) stopped writing FL policies. Citizens Insurance: state-backed insurer of last resort; depopulation program transfers Citizens policies to private market — buyers may be moved. Average FL homeowners insurance: $2,100-$6,000+ vs $1,200 national average. 2022-2023 legislative reforms (SB 2-A, HB 837): early stabilization signs. Critical rule: get 3 insurance quotes BEFORE making an offer. Own Luxury Homes® FL BK3626873. 12-Point Agent Integrity Audit™.
Florida Property Insurance Crisis: What Buyers Must Know in 2025-2026
The Florida property insurance crisis is the most urgent financial risk factor for buyers in 2025-2026. Understanding it before making an offer is not optional.
What Happened to Florida's Insurance Market
Between 2020 and 2024, Florida's property insurance market experienced a crisis without modern precedent in a major U.S. state: Carrier exits and insolvencies: six Florida-based property insurance companies became insolvent and went into receivership between 2021 and 2024 — Florida Specialty, Avatar, St. Johns, Lighthouse, Weston, FedNat (partial). Multiple national carriers (Farmers Insurance, AAA, Lexington Insurance) stopped writing new homeowners policies in Florida or dramatically reduced their Florida exposure. Root causes: (1) high litigation rates — Florida historically generated 9% of U.S. homeowners claims but 70%+ of nationwide insurance litigation, driven in part by assignment of benefits (AOB) fraud where contractors filed inflated claims and sued insurers; (2) hurricane losses from Ian (2022), Idalia (2023), and prior seasons; (3) rising reinsurance costs as global reinsurers repriced Florida exposure. Legislative response: Florida enacted SB 2-A (December 2022) and HB 837 (March 2023) to reduce litigation, reform attorney fee multipliers, and tighten AOB rules. Early data suggests fewer frivolous suits, and some carriers have begun re-entering the market. But the damage to market capacity persists. Result for buyers: finding comprehensive homeowners insurance in Florida, particularly for older homes or coastal properties, is genuinely challenging. Some buyers discover they can only get Citizens Insurance (the state's insurer of last resort) at higher premiums than comparable private coverage would have cost 3 years ago.
Citizens Insurance: What Buyers Must Understand
Citizens Property Insurance Corporation is Florida's state-backed insurer of last resort. When private carriers won't write a policy, or when Citizens is cheaper than the available private options, homeowners turn to Citizens. Who is eligible: Citizens is available to Florida homeowners who: cannot find private coverage, or for whom available private coverage is more than 20% more expensive than Citizens. Coverage limitations: Citizens policies typically have lower coverage limits than private market policies for the same premium. Citizens also has specific exclusions and limitations that vary by policy type. The depopulation program: Citizens actively "depopulates" by transferring policies to private carriers. A homeowner who accepts Citizens coverage may receive a notice from Citizens that their policy is being transferred to a private carrier — and they must accept the transfer or lose coverage. The private carrier may offer different (often higher) rates or different coverage terms. Assessment risk: if Citizens faces losses beyond its reserves (from a catastrophic hurricane season), Florida law allows Citizens to assess ALL Florida policyholders — not just Citizens policyholders — to cover the shortfall. Even buyers with private insurance can face Citizens assessments.
What Florida Buyers Must Do: Insurance Before Offer
The absolute rule: get insurance quotes BEFORE making an offer on any Florida property. Do not make an offer and then discover the insurance is unaffordable or unavailable. The insurance quote is part of your due diligence, not an afterthought. Steps: 1. Use the property address and a basic property description (construction type, year built, square footage, distance to coast) to get preliminary quotes from 3+ insurers 2. Include Citizens Insurance in your comparison 3. Get the actual inspection-based quote after your home inspection (preliminary quotes are estimates; the final quote may differ after the insurer reviews the property) 4. For properties in flood zones: get flood insurance quotes simultaneously (NFIP and private) 5. For older properties: investigate whether a 4-point inspection (roof, HVAC, electrical, plumbing) will be required before binding coverage 4-point inspections: many Florida insurers require a 4-point inspection for homes over 20–25 years old before writing a policy. If the 4-point reveals systems in poor condition (roof near end of life, knob-and-tube wiring, polybutylene plumbing), insurers may decline to write coverage or require repairs before binding.
“The insurance question in Florida is not a formality — it is a core financial variable that determines whether a property is actually affordable. I have had buyers whose payment calculation was $800-$1,400/month off because they used national average insurance costs instead of actual Florida quotes for the specific property. I have also had buyers make offers on properties that turned out to be effectively uninsurable at market rates except through Citizens, at premiums that made the purchase financially unviable. Get the insurance quotes before the offer. In Florida, this is not optional advice. It is the most important pre-offer step after the mortgage pre-approval.”
— Ryan Brown, Principal Broker & CEO, Own Luxury Homes®
Why is homeowners insurance so expensive in Florida?
Florida homeowners insurance is expensive due to: high hurricane exposure (Florida is the most hurricane-exposed state); flood risk (30% of national flood claims); high litigation rates historically; rising reinsurance costs; insurer exits reducing market competition; and Florida's unique legal environment. Legislative reforms in 2022-2023 are beginning to show early signs of market stabilization, but premiums remain well above national averages. Average Florida homeowners insurance: $2,100-$6,000+ per year vs $1,200 national average.
Can I get homeowners insurance in Florida?
Yes, but it requires more effort than in most other states. Steps: contact multiple independent insurance agents (not captive agents for one company) who can quote multiple carriers; include Citizens Insurance in your comparison as a baseline; understand that older homes (especially with older roofs, older electrical systems, or in high-risk areas) may require repairs before some carriers will insure them; and get quotes BEFORE making an offer, not after. For coastal properties, supplement with separate flood insurance quotes. Many buyers use a Florida-based independent agent who specializes in the current market and knows which carriers are actively writing in specific counties.
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— Ryan Brown, Principal Broker & CEO, Own Luxury Homes® (FL License BK3626873)