The Florida Homeowners Market is in full crisis mode with access to homeowners insurance quickly slipping from the grasp of many Florida residents due to a "perfect" storm.  Many homeowners are now finding insurance impossible to secure or afford as many insurers in the state have pulled back on providing coverage in the state, seven have completely pulled out of the state, many others have requested significant premium increases, two have become insolvent with several others in dire financial straits and possibly facing regulatory action against them.  

Legislative attempts to fix this "perfect" storm have not been successful to date, although several bills have recently passed a key Senate Subcommittee that would help to address some of the issues.  Senate Bill 1728 would make several changes, most notably allowing insurers to pay roof claims based upon actual cash value of the roof instead of full replacement value except for damage due to hurricanes.  Senate Bill 186 is designed to help shore up the insurer of last resort, Citizens Property Insurance Company, by making it harder for seasonal or secondary home owners in the state to qualify for continued coverage under Citizens if another insurer will write the property at slightly or moderately higher premiums. 

Much of Florida's homeowners insurance woes can be traced back to 1992 when Hurricane Andrew blew through the state causing over $26.5 billion in damages that dwarfed damages from any previous hurricane. Andrew left behind not only a trail of destruction in Florida, but also lasting effects on the Florida insurance industry, as more than half of those properties damaged were insured to the tune of  $15.5 billion. Prior to Andrew the worst case scenarios for a hurricane striking Florida were in the $7 billion range, although one study had predicted claims could reach up to $60 billion, but insurers in the state didn't pay much attention to the scenarios until after Andrew. In addition, insurance companies at the time failed to factor in the increase in coastal property values, and the increase in costs to rebuild and replace those properties. In the wake of Andrew,  eight companies became insolvent which triggered the Florida Insurance Guaranty Association (FIGA) to step in, take over and pay outstanding claims. Many of the insolvencies were companies writing only in Florida or regional carriers, as the larger national carriers were able to ride out the storm.