Florida’s home insurance market is on the brink of collapse, serving as a potential harbinger for the rest of America. Experts are raising alarms about the possible repercussions nationwide.

Over the last ten years, Florida has witnessed a dramatic decline in private home insurance policies, plummeting from more than three million to a mere 700,000. This sharp reduction highlights a troubling trend that could soon affect other states.

The underlying cause is clear: the increasing frequency of natural disasters is compelling insurers to either raise their rates significantly or withdraw from the market entirely. In Florida, the devastation caused by hurricanes and the growing concerns over the structural integrity of some condominiums have driven many insurers to retreat. This has resulted in a surge in premiums, which now average $3,454 annually—a 22 percent increase. Others have chosen to cease offering coverage in the most vulnerable areas altogether.

The impact of these developments is profound, forcing millions of Floridians to rely on the state’s insurer of last resort and rendering vast areas effectively uninsurable.

However, this issue extends beyond Florida’s borders. With wildfires, floods, and hurricanes increasingly affecting places like California, Texas, and Louisiana, experts caution that a similar insurance crisis could soon spread across the United States.

And the crisis isn’t limited to Florida. As wildfires, floods, and hurricanes batter other regions — including California, Texas, and Louisiana — experts warn that the same insurance collapse could soon sweep across the US. 

Dave Jones, the former insurance commissioner of California, put it bluntly: ‘The insurance crisis in the US is the canary in the coal mine — and the canary is dead.’

If insurers keep retreating, millions more homeowners could see property values plunge, mortgages fall through, and entire housing markets start to unravel. 

Hurricane Irma slammed Florida in 2017 and the state’s home insurance market is imploding — experts say it’s a sign of what’s coming for the rest of America

In just ten years, the number of private home insurance policies in Florida has plunged 78 percent, forcing millions of homeowners onto the state’s last-resort insurer

As hurricanes intensify and floods worsen in Florida, private insurers have concluded that large areas of real estate are essentially uninsurable

Dave Jones, the former insurance commissioner of California sent a warning to homeowners. ‘The insurance crisis in the US is the canary in the coal mine, and the canary is dead,’ he said

Active insurance policies in Florida plummeted 78 percent over the past decade while the state’s last resort insurer, Florida’s Citizens Property Insurance Corporation, has grown from six percent to 63 percent of the market share since 2014, according to a report by Deep Sky Research.

The report, ‘Uninsurable: Florida’s Home Insurance Collapse Signals National Trend,’ reveals that the number of home insurance policies is down 78 percent from 3.2 million to 710,000 in just a decade. New policies written quarterly collapsed 77 percent from 164,000 to 37,000.

Premiums are also at breaking point. The average annual premium reached $3,454 in 2024, up 22 percent since 2014.

Flooding costs are also jumping. The National Flood Insurance Program payouts in 2024 were more than in the previous 14 years combined, said the report.

Florida faces multiple climate threats, like intensifying hurricanes, rising sea levels, and increasing flood risk. 

The report found that the frequency of extreme hurricane rainfall has jumped 300 percent over the past four decades, and hurricanes that previously occurred once every 100 years are now happening every 25. 

Maximum hurricane rainfall severity has grown 33 percent, raising the potential for damage. These trends are forcing insurers to flee states like Florida.

While 2025 has been a relatively quiet hurricane season for Florida so far, but Hurricane Melissa just tore Jamaica to pieces and Florida is still in hurricane season.

Hurricane Milton approaches as a Category 3 storm in Sarasota, Florida, in 2024, where there are fewer insured homeowners than ever

A tattered American flag hangs outside a damaged home in Florida after Hurricane Milton in October 2024

Insurance agencies are causing problems for homeowners looking for wildfire insurance, following Florida’s lead of agencies who will no longer offer insurance in the state 

Florida is ground zero of the wider national crisis, and the industry’s lack of response won’t be good for the increasing hurricane risk in the United States.

The report used a comprehensive hurricane severity scale that accounts for rainfall and storm surge—not just wind speed—to show the most destructive storms are becoming more common and severe across the US. 

In California, wildfires are the most destructive problem, while Louisiana faces severe flooding and Texas has extreme storms. Insurers are bailing on any at-risk areas.

Economists call it the ‘death spiral’—a self-reinforcing cycle where climate risks drive losses, insurers exit, healthy customers drop coverage, risk rises, and the cycle accelerates. 

‘Hurricane damage is primarily caused by water, not wind,’ the report said. ‘Rising sea levels mean storm surges penetrate further inland, while warmer atmospheres hold more moisture, causing more extreme rainfall.’

The insurance collapse threatens broader economic contagion. 

Without affordable insurance, property transactions freeze, potentially cratering home values. National banks hold hundreds of billions in Florida mortgages that could become distressed. Real estate investment trusts with Florida exposure would see valuations plummet. Municipal bonds backed by property taxes could face downgrades. 

Mark Friedlander, of the Insurance Information Institute, an association for insurers, told the Daily Mail the small number of residents who do have insurance options are  passing on flood insurance due to high prices.

A man walks from his destroyed home after Hurricane Milton hit Englewood, Florida, in 2024. Florida is ground zero of the wider national crisis, and the industry’s lack of response won’t be good for the increasing hurricane risk in the United States

Increasing natural disasters in Florida have meant that private companies have pulled out of the state entirely or have slashed their coverage options

Florida saw 11 $4 billion weather disasters in 2024, including Hurricane Milton, yet homeowners have little to no insurance options because of the high prices

He said even people living in X flood zones – low likelihood of flooding – need insurance and estimates just one inch of flood water can cause damage of $25,000.

He continued: ‘Imagine a foot of water in your house and what that’s going to cost you. Florida is very vulnerable to flooding not just hurricane season, it’s year round.’ 

‘Time is running out,’ the report concludes.  

‘One big storm this fall could bring catastrophic losses to thousands of uninsured Florida homes. 

‘The insurance market has delivered its verdict on climate risk, and the rest of the economy will soon follow.’