Florida, Louisiana home insurance companies struggle to find solutions amid rising costs

Florida, Louisiana home insurance companies struggle to find solutions amid rising costs

The devastation caused by Hurricane Ian in Florida and severe weather in parts of Louisiana has prompted insurance companies to pack their bags or hike prices.

If they can't get coverage, they're facing rising premiums.

According to data from policygenius.com, the national average for annual home insurance rates is $1,899. The average annual home insurance rate in Florida is $2,442 and Louisiana is $2,507.

In the fall of 2022, Florida suffered from Hurricane Ian, which caused severe damage to Florida's west coast beaches as Category 4 storm, according to FOX Business's Ashley Webster.

Webster said that Hurricane Ian was the second-largest insurance loss behind Katrina back in 2005, and that the full extent of damages is still being assessed. Louisiana, which bared the brunt of Katrina's wrath in 2005, has faced numerous natural disasters since the catastrophic storm. Hurricane Laura in 2020 and Hurricane Ida in 2021 prompted higher premiums for Louisiana residents.

Last year, dangerous storms and tornadoes caused damage across the state just before the Christmas holiday, adding to rising costs and an insurance company exodus.

More than 20 companies have gone under or were withdrawn from the state, forcing hundreds of thousands of families to pay higher premiums or go without coverage, according to Fox News' Rebekah Castor earlier this month.

The Louisiana Department of Insurance Commissioner Jim Donelon told Castor that natural disasters across the country are also contributing to the state's rising costs.

All of it comes from the reinsurance market. The challenges are making insurance more difficult to come by, and it is making us more difficult to come by. Some residents in southern states like Florida and Louisiana are facing the decision of whether to purchase home insurance.

In Florida, approximately 12% of homeowners don't have home insurance. Data from the state shows that the Sunshine State accounts for about 9% of all claims nationally, but 79% of all lawsuits in the U.S. over home insurance. Many of these suits are considered fraudulent.

Insurance companies weighing these factors have often dropped customers, leaving the residents to pursue expensive state-backed insurance.

One Jupiter, Florida resident shared that state-backed insurance would cost him $6,000 annually when he was dropped from his home insurance company.

George Kyritsopoulos said it remains a problem. The cost goes up because it's not only the $5,000 that it's costing me. I still have flood insurance in the event of a flood in a non-flood zone. It's another $750. It's close to $6,000. The state's insurance incentive program, created in Louisiana, would offer companies millions of dollars if they commit to doing business in the state. The program was created in 2005 after Hurricane Katrina and Hurricane Rita when it experienced a similarly difficult homeowners' insurance market.

Florida Gov. Ron DeSantis wants private insurance companies to step up and help address the issue.

You have to have a solvent private market. It's not solvent, DeSantis said last month. It would be a huge financial liability. The state passed sweeping property insurance legislation to address some of the concerns of homeowners last month.

While state leadership is working to find solutions to the insurance company exodus and premiums price spikes, residents remain under financial strain awaiting long-term solutions for the insurance crisis.