70% of Florida Homeowners Have Seen Rise in Insurance Costs or Changes in Coverage

Written by Posted On Wednesday, 17 April 2024 11:39

Nationwide, one-third of homeowners who lost insurance have moved or plan to move, but nearly the same share are staying in their home with little or no coverage

Nearly three-quarters (70.3%) of Florida homeowners and over half (51%) of California homeowners say they or the area they live in has been affected by rising home insurance costs or changes in coverage (e.g., their insurer dropped them) in the past year. That compares with less than half (44.6%) of homeowners nationwide, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage.

This report is based on a Redfin-commissioned survey by Qualtrics in February 2024. The nationally representative survey was fielded to 2,995 U.S. homeowners and renters.

Insurance is top of mind for homeowners in Florida and California because those states are the epicenters of the insurance housing crisis. Many homeowners have seen their premiums skyrocket, and some have lost coverage altogether because intensifying natural disaster risk has prompted many insurers to stop doing business in Florida and California. Seven of California’s biggest property insurers have recently opted to limit new policies in the Golden State amid increasing wildfire risk. And in the Sunshine State, 11 insurers have liquidated amid growing flood and storm risk.

Mounting insurance costs and natural disasters are prompting some people to relocate. In Florida, 11.9% of survey respondents who plan to move in the next year cited rising insurance costs as a reason—roughly twice the national share of 6.2%. And in California, 13.1% of people who intend to relocate in the coming year cited concern for natural disasters or climate risks as a reason, compared with 8.8% of respondents nationwide. But while some people are leaving disaster-prone areas, there are still more people moving in than out, a separate Redfin analysis found.

“Homeowners living in areas where insurance premiums are surging are at risk of seeing their properties gain less value than homeowners in areas with stable premiums—and in some cases, they may even lose money,” said Redfin Chief Economist Daryl Fairweather. “Homes with low disaster risk and low insurance costs will likely become increasingly popular, and thus more valuable, as the dangers of climate change intensify.”

Condo prices in some parts of Florida have already started to fall amid an increase in insurance costs and HOA fees.

12% of Florida Homeowners Who Have Faced Insurance Changes Were Dropped By Their Insurer

This section focuses on the 1,198 U.S. homeowner respondents who said they or their area has or may have been impacted by rising home insurance costs or changes in coverage in the past year. Redfin asked these homeowners specifically which insurance insurance-related changes they’ve seen and are concerned about.

Roughly one in eight Florida respondents (12%) and one in nine California respondents (10.7%) said their insurance company stopped offering coverage for their home, compared with 8.3% of respondents overall.

Other homeowners are worried they will be dropped by their insurer in the future: Over one-quarter (27.7%) of respondents in Florida said they are or have been concerned their insurer may stop offering coverage for their home, compared with 13.5% of respondents in California and 8.9% of respondents as a whole.

Most respondents have seen a rise in insurance costs: Overall, nearly three-quarters (71.7%) said their policy premium increased, with a slightly higher share in Florida (76%) and a slightly lower share in California (62.9%).

The average annual U.S. home insurance rate is expected to rise 6% this year to $2,522 after surging 19.8% between 2021 and 2023, according to Insurify. In Florida, the average annual rate is $10,996—higher than any other state.

1 in 3 Homeowners Who Lost Insurance Coverage Has Moved or Plans To Move

Roughly 100 homeowners who participated in the survey indicated that their insurance company stopped offering coverage for their home. One-third (33.2%) of those respondents moved or plans to move to a new area where coverage is available. But nearly the same share (30%) are staying in their home with little or no coverage.

Almost half (46%) of respondents who lost insurance coverage said they’ve found a new insurer to cover their home. A similar share (44.5%) said they pay a significantly higher premium for coverage than before.

Oftentimes when homeowners lose insurance coverage through a private insurer, they’re forced to buy into a more expensive state-created plan—such as California’s FAIR Plan or Florida’s Citizens Property Insurance Corp. But in many cases, it’s unclear whether those programs have enough money to cover losses; a Bloomberg analysis found that 36 states have residual insurance plans, but 21 of those don’t explicitly spell out how they’d pay deficits that exceed their assets.

Only One-Third of Homeowners Know Which Natural Disasters Their Insurance Covers

Roughly one-third of U.S. homeowners (34%) know which natural disasters their insurance for their home covers. An even smaller share—27.2%—know which natural disasters their insurance covers and how much damage is covered under their policy.

With climate disasters on the rise, homeowners should revisit their existing insurance policies so they know exactly what and how much is covered, Fairweather said. In some cases, they may want to purchase an additional policy covering a specific disaster, like fire or flood.

Over One-Third of Real Estate Agents Have Seen an Increase in Insurance-Related Issues

More than one-third of real estate agents (34.4%) have experienced an increase in issues related to home insurance during transactions over the past year.

This is according to a separate Redfin-commissioned survey of 500 real estate agents from a wide spectrum of U.S. brokerages, conducted by Qualtrics in December 2023.

The share was significantly higher in Florida and California. In Florida, nearly three-quarters (73%) of agents have seen an uptick in insurance issues in the last year, and in California, the share was 64%.

To view the full report, including charts, please visit: https://www.redfin.com/news/home-insurance-survey-report-2024

Rate this item
(0 votes)

About Redfin
Redfin (www.redfin.com) is a technology-powered real estate broker, instant home-buyer (iBuyer), lender, title insurer, and renovations company. We sell homes for more money and charge half the fee. We also run the country's #1 real-estate brokerage site. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. 


Agent Resource

Before You List

Realty Times

From buying and selling advice for consumers to money-making tips for Agents, our content, updated daily, has made Realty Times® a must-read, and see, for anyone involved in Real Estate.