Insurance market update: Property coverage in South Florida

As most Floridians are aware, the price of Property Insurance has not gotten any cheaper. In fact, over the past few years it has nearly tripled. While many are quick to blame the macro trend of inflation for this increase, there are actual events with consequences inherent to the Florida market, that should be credited for the recent developments.

On September 28th, 2022, Hurricane Ian made landfall on Florida’s West Coast near the Fort Myers area.  This monster storm left a legacy of destruction so immense, that it resulted in Hurricane Ian being declared the deadliest hurricane in Florida since 1935, the strongest since 2018, and the costliest in history. With damage totals now estimated at $115-$120 billion, Hurricane Ian has become the catalyst for, what is now, one of the most challenging Property Insurance marketplaces in Florida.

In the days and weeks following the storm, the true value of damages remained uncertain. Originally, total losses were estimated at $50-$60 billion. With a vast majority of those damages being insurable, many insurers would have astronomical losses, set for reserves, to be paid out. As losses were realized and continued to mount, insurers and their reinsurance partners (with most treaties renewed on January 1st) began to fully understand that the storm’s cost would be far greater than anticipated. It became apparent that this soon would put many insurers out of business – and for the ones who survive – it would significantly impact their appetite and cost within the state. 

When January 1st arrived and reinsurance treaties were renewed, we saw exactly that. Numerous insurers either became insolvent or decided to stop doing business in Florida. Insurers that remained operational in the state, decided to drastically reduce their capacity within the marketplace. Capacity includes the availability of limits such as Named Windstorm (Hurricanes), Flood, and overall Total Insurable Values. Meanwhile, despite its history of storms, thousands of people and businesses continued to move to Florida on a weekly basis. This influx drives increased demand for New Construction and existing property placements which has not yet diminished and, in fact, continues to rise. From an economic perspective, the vast reduction in supply and availability of capacity, coupled with the fierce and rising demand for coverage, has resulted in a sharp spike in the pricing of Property Insurance across the entire state.

As the reality of the current marketplace becomes evident to the masses, there are no expectations that it will cool off any time soon. Insurers and underwriters have become extremely selective in the risks they assume and the locations where they will deploy capacity. We anticipate they will continue to do so until the ramifications of Hurricane Ian are fully in the rear-view window, which could be another 12-24 months.

It is vitally important that, as an insured and business owner, you seek to understand the marketplace and work with your broker to ensure that when budgets and pro formas are developed, either as an Owner or Contractor, that the cost of Property/Builders Risk Insurance is accurate from the start. Otherwise, the benefit of sound coverage is sacrificed when value engineering a program to a specific/lower price. Working with a construction-focused broker such as American Global, who has a deep understanding of construction risk and key relationships across the entire marketplace, will help yield the best results.

If you’d like to learn more or are looking for a broker with extensive knowledge and creative solutions for the Florida marketplace, visit American Global at: or contact: [email protected].


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