Homeowners insurance in Florida is the most expensive in the U.S., up 42 percent in the last year alone and rising as Floridians pay an average of $6,000 per year for premiums in 2023 compared to $1,700 for the rest of the country.

Despite the rising costs, Florida homeowners are being squeezed even more by fewer options for coverage. Insurance companies are putting a pause on new property policies or fleeing the state, fearing lower profits.

In the past 18 months, 15 insurance companies have decided to stop writing new business in Florida, according to Mark Friedlander, spokesman for the Florida-based Insurance Information Institute.

These include Farmers Insurance Group, which said in a statement, “With catastrophe costs at historically high levels and reconstruction costs continuing to climb, we implemented a pause on writing new homeowners policies to more effectively manage our risk exposure,” NBC affiliate WESH-TV reported.

Faced with double-digit percentage increases for the past few years, Floridians are being forced to make tough decisions about giving up insurance coverage, selling their homes, or leaving Florida, according to Tasha Carter, Florida’s insurance consumer advocate.

“When your insurance goes up $2,600 and your income does not change, we know that we’re in a crisis,” said Rep. Dianne Hart, a Tampa Democrat and chairwoman of the Florida Legislative Black Caucus, in a Tampa Bay Times report.

Citizens Property Insurance, the state-backed company that promotes itself and its mission as Florida’s insurer of last resort, predicts it’s on track to hit a record 2 million policies in 2023.

Citizens was created by the Florida Legislature in 2002 as a nonprofit, tax-exempt, government entity to provide property insurance to eligible Florida property owners unable to find insurance coverage in the private market. 

Florida homeowners accounted for 76 percent of all homeowners insurance lawsuits over claims filed nationwide in 2019, according to the state insurance regulator.

The lawsuits caused the private carriers to lose money, so the companies’ only choice was to limit the number of policies they can write in Florida, putting pressure on Citizens, NPR reported.

“All the companies are raising the premiums so high, it’s forcing people to cancel with that particular company and look for somewhere else where they can get a better deal,” said Tracey Gillespie, a homeowner in Tampa and Port Orange. Gillespie is one of 400,000 Florida residents dropped by an insurance company and forced to use Citizens.

The cost of claims for catastrophes such as Hurricane Ian is higher than ever, Friedlander said. “And we saw this here in Florida play out last year … we estimate (Hurricane Ian) to be a $60 billion insured loss event.”

Florida home values are hardly the highest in the U.S. They rank No. 18, according to Zillow, so that doesn’t explain the state’s ranking for highest homeowners insurance rates, Rick Newman wrote for Yahoo Finance. Hurricanes and flooding aren’t the biggest problem, either.

Florida accounted for 7 percent of all homeowners insurance claims — about the same as its share of the U.S. population — but 76 percent of all lawsuits involving homeowners policies, according to a 2022 report by the Florida Office of Insurance Regulation (OIR).

Fraud and abuse have made Florida’s homeowners insurance market so unprofitable that 15 carriers have become insolvent in the state since 2020 — and others refuse to do business there, Newman wrote.

“This is a man-made catastrophe,” said Logan McFaddin, vice president of state government relations at the American Property Casualty Insurance Association. “It’s not just the weather. It’s frivolous litigation and fraud.”