On June 29, FedNat Insurance Co. will cancel 68,200 Florida homeowners’ insurance policies, just one in a series of coverage drops that is threatening the state’s economy and leaving Floridians scrambling to insure their homes as hurricane season ramps up. Climate change, mainly caused by the extraction and combustion of fossil fuels, is making severe hurricanes stronger and more damaging in multiple ways and the 2022 Atlantic hurricane season is expected to be busier than normal with at least 3 major hurricanes.
“This is not a survivable market. Homeowners cannot find coverage,” Mark Friedlander, of the Insurance Information Institute, said in a recent webinar. Four insurance companies have gone into receivership since February and at least one has failed to secure required reinsurance backing. The flight of private insurers from the state has pushed 883,000 homeowners to buy insurance from Citizens Property Insurance Corp., the state’s insurer of last resort, more than twice as many as three years ago. Nearly half of Citizens’ exposure is in three hurricane-prone southeast Florida counties and a major hurricane could potentially wipe out the program’s reserves and force millions of residents to pay an insurance surcharge.
“This is one of those stories that, unfortunately, the news is not getting better,” Citizens’ COO Kelly Booten, told an advisory committee meeting on June 8. “We are continuing to grow as companies are shedding policies or temporarily shutting down.” (E&E $; Receivership and reinsurance: WFTS; Climate Signals background: Hurricanes)