Sign In or Create an Account.

By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy

Economy

Why Insurance Companies Are Fleeing Florida

It’s not just the hurricanes.

A house destroyed by a hurricane.
Heatmap Illustration/Getty Images

The Florida insurance market took another hit this week when Farmers announced it would pull out of the state, leaving around 100,000 customers unable to renew their policies.

While the news garnered headlines, it was exceptional not so much for Farmers pulling out, but for how long the insurance giant had stayed in the Florida market. Other national carriers had long since left and remaining Florida-specific carriers have been suffering under the weight of the state’s dangerous weather and uniquely lawsuit friendly legal environment.

At the same time that Farmers announced its departure, records were being set for ocean temperature in Florida, crossing 90 degrees in the waters off the southern part of the state. And the state may be in for nasty storms later this year. Forecasters at Colorado State University last week projected an “above-average” Atlantic hurricane season .

Farmers’ departure from Florida is also just the latest example of a major national carrier leaving a large, disaster-prone state. Allstate and State Farm said earlier this year they were leaving the California property market.

Farmers “looked at their book and determined they needed to reduce their catastrophe exposure. Most national carriers made that decision a long time ago,” RJ Lehmann, editor-in-chief and senior fellow at the International Center for Law and Economics, told me.

Customers with Farmers-branded home, auto, or umbrella insurance will not be able to renew their policy as their terms expires. The changes will not begin to take effect for 90 days.

“This business decision was necessary to effectively manage risk exposure,” Farmers spokesperson Trevor Chapman said in a statement. The company will continue to offer insurance through other brands it owns, Bristol West and Foremost.

The future of Florida’s insurance industry could be a harbinger for the rest of the country as it deals with extreme weather exacerbated by rising temperatures. Florida is a tough insurance market for the obvious reasons — property damage caused by wind, rain, and flooding from tropical storms (not to mention wildfires and tornadoes) — as well as its unique (although changing) legal environment.

While more and more of Florida’s insurance business is being taken on by the state-run Citizens Property Insurance Corporation, some followers of the state's economy are cautiously optimistic that insurers could eventually return to the state. But that return would likely be conditioned on a market and legal environment far more friendly to insurance companies, one with high premium and reduced rights for policyholders. After all, Florida’s high insurance rates have hardly stopped people from moving in, but the combination of extreme weather and high homeowner insurance rates could put the Florida dream of home ownership in America’s tropical climate out of reach for many.

The legal environment is changing thanks to reforms of Florida’s uniquely insurance company-unfriendly litigation system that have been signed by Governor Ron DeSantis over the past few years. This included eliminating Florida’s distinctive “one-way” attorney fees set-up, whereby if a policyholder won any amount of money from an insurer, the insurance company would pay attorneys fees for both sides. This system was obviously disliked by insurance companies, who argued that it led to the flowering of a Florida-specific cottage industry for trial attorneys; while those attorneys argued it gave policyholders a shot in prevailing against well-funded insurance companies.

Another bill banned the practice of letting policyholders “assign” the right to pursue a claim — and sue insurers — to contractors, another practice blamed by the industry for increased litigation.

Florida had over 75 percent of homeowners’ lawsuits in the country as a whole, despite only having 7 percent of the homeowners’ insurance claims, according to data from the Florida Office of Insurance Regulation.

Jeff Brandes, a former Republican state legislator who has long advocated to litigation reforms, predicted that the legislation, which was passed in April, will take somewhere between 18 and 24 months to have an effect on the market.

“I fully expect three-five companies to pull out and rates to go up 10 to 15 percent next year,” Brandes said, although he noted that he expected rates to stabilize in 2025.

In February, the St. Petersburg-based United Property & Casualty Insurance Company was deemed insolvent by state regulators. Some 15 insurers became insolvent between 2020 and the end of 2022.

Since 2016, Florida property insurance companies have been losing money on their underwriting — premiums collected minus claims paid — and only in the first quarter of this year did the industry as a whole turn a net profit, and that was thanks to investment earnings; underwriting profit was still negative.

Even if insurers return to the state, that doesn’t mean that said insurance will necessarily be attractive to homeowners: Part of why a less litigation-friendly market may be tempting to insurers is the very high rates that Florida policyholders pay for home insurance.

Average premiums in the state range from $1,651 in Sumter County in Central Florida to as high as $5,665 in Miami-Dade or $5,710 in Palm Beach, according to the Florida Office of Insurance Regulation. The nationwide average is around $1,900.

“We’re getting to a place where the availability problem will get better,” Lehmann said. “The affordability problem? We live on a low-lying peninsula with some of the most hurricane prone waters in the world.”

You’re out of free articles.

Subscribe today to experience Heatmap’s expert analysis 
of climate change, clean energy, and sustainability.
To continue reading
Create a free account or sign in to unlock more free articles.
or
Please enter an email address
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
AM Briefing

AM Briefing: Greenland Dreamin’

On AI forecasts, California bills, and Trump’s fusion push

Greenland.
Heatmap Illustration/Getty Images

Current conditions: The intense rain pummeling Southern California since the start of the new year has subsided, but not before boosting Los Angeles’ total rainfall for the wet season that started in October a whopping 343% above the historical average • The polar vortex freezing the Great Lakes and Northeast is moving northward, allowing temperatures in Chicago to rise nearly 20 degrees Fahrenheit • The heat wave in southern Australia is set to send temperatures soaring above 113 degrees.


Keep reading...Show less
Yellow
Energy

Is Burying a Nuclear Reactor Worth It?

Deep Fission says that building small reactors underground is both safer and cheaper. Others have their doubts.

Burying an atom.
Heatmap Illustration/Getty Images

In 1981, two years after the accident at Three Mile Island sent fears over the potential risks of atomic energy skyrocketing, Westinghouse looked into what it would take to build a reactor 2,100 feet underground, insulating its radioactive material in an envelope of dirt. The United States’ leading reactor developer wasn’t responsible for the plant that partially melted down in Pennsylvania, but the company was grappling with new regulations that came as a result of the incident. The concept went nowhere.

More than a decade later, the esteemed nuclear physicist Edward Teller resurfaced the idea in a 1995 paper that once again attracted little actual interest from the industry — that is, until 2006, when Lowell Wood, a physicist at the Lawrence Livermore National Laboratory, proposed building an underground reactor to Bill Gates, who considered but ultimately abandoned the design at his nuclear startup, TerraPower.

Keep reading...Show less
Green
AM Briefing

AM Briefing: Cheap Crude

On energy efficiency rules, Chinese nuclear, and Japan’s first offshore wind

An oil field.
Heatmap Illustration/Getty Images

Current conditions: Warm air headed northward up the East Coast is set to collide with cold air headed southward over the Great Lakes and Northeast, bringing snowfall followed by higher temperatures later in the week • A cold front is stirring up a dense fog in northwest India • Unusually frigid Arctic air in Europe is causing temperatures across northwest Africa to plunge to double-digit degrees below seasonal norms, with Algiers at just over 50 degrees Fahrenheit this week.


THE TOP FIVE

1. Crude prices fell in 2025 amid oversupply, complicating Venezuela’s future

A chart showing average monthly spot prices for Brent crude oil throughout 2025.EIA

Keep reading...Show less
Blue