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An avalanche of lawsuits fueled by roofing scams has plunged Florida into a property insurance crisis that has forced dozens of companies to shut their doors, drop customers, raise rates or flee the state. It’s a slow-motion collapse that lawmakers have known about for years but have failed to fix.

The mess has made it harder for people to protect their homes in a state that is frequently battered by high winds, hard rains and hail and is increasingly vulnerable to climate change

At stake is Florida’s ability to withstand natural disasters, and its reputation as a place to live well cheaply.

“Florida is the most volatile property insurance market in the country and it is on the verge of collapse,” said spokesman for the Insurance Information Institute.

Insurance industry’s net losses have risen in each of the past five years, surpassing $1 billion in 2021, according to state officials. Eight insurance companies operating in Florida have gone out of business since 2021. Those that remain have sought rate increases ranging from 15 percent to 96 percent and have become more selective about who they will cover; some are asking homeowners to replace their roof in order to get a new policy. Others are dropping customers; one company recently announced that it was canceling 56,000 policies.

The Insurance Information Institute estimates that average premiums in Florida could rise up to 40 percent this year.

The closings, rate increases and dropped policies have triggered a rush of homeowners to a state-run insurer that is meant to be a carrier of last resort. The insurer, Citizens Property Insurance Corp., said it is signing more than 5,000 new policies a week and has doubled its rolls in two years to more than 800,000. The bigger the company gets, the more at risk it is of being unable to pay claims if the state is hit with a major hurricane.

Because many home insurance companies have been hit hard by the rampant and fraudulent litigation, they may no longer be as financially stable as they were. In late July 2022, financial strength rating company Demotech announced it was considering downgrading the financial strength ratings of 27 property insurance companies.

Average cost of homeowners insurance for $250,000 dwelling coverage

                         1.          Oklahoma       $3,659

                         2.          Kansas         $3,083

                         3.          Nebraska       $2,952

                         4.          Colorado       $2,152

                         5.          Arkansas       $2,123

                         6.          Kentucky       $2,009

                         7.          Louisiana      $1,992

                         8.          Florida        $1,981

Flood insurance

Hurricanes, tropical storms and rising sea levels make Florida one of the country’s most flood-prone states — and you don’t have to live near the beach to be at risk. That’s why you may want to consider buying flood insurance in Florida, regardless of where you live in the state.

For example, Hurricane Ian caused between $40 billion and $64 billion of damage in Florida in 2022, according to an estimate from CoreLogic, an analytics company. Although the Gulf Coast suffered the worst destruction, there was also major flooding in inland areas, where heavy rainfall caused rivers and ponds to overflow.

Estimates that between $10 billion and $16 billion of Ian’s total destruction was uninsured flood damage. Without flood insurance, many homeowners and communities had little or no financial support to help them pick up the pieces.

The average cost of flood insurance in Florida is $677 per year for a policy from the National Flood Insurance Program, Florida’s largest flood insurance provider. The flood insurance rate will depend on factors such as the home’s elevation and proximity to water sources.

In Florida, the nation’s most flood-prone state, 19 percent of households have flood insurance. That’s the second-highest rate in the U.S. after Louisiana. Even so, 7 million households in the state don’t have flood coverage.

Auto insurance

Floridians get to pay extra-high increases over and above the national average due to a number of unique Florida factors like hurricane damage, a high rate of uninsured drivers, high auto theft rates and claims fraud.

The nation’s fourth-highest vehicle theft rate. In 2022, Floridians lost 45,973 vehicles to thieves — a 6% increase over 2021.

Claims-fraud levels are high in the state, particularly staged accidents in South Florida and windshield replacement scams across the state.

The number of lawsuits stemming from those glass replacement schemes in 2023 will likely surpass 2022′s record of 33,196. Lawsuits by drivers, despite recent legal reforms banning one-way attorney fees, are averaging more than 50,000 a month in the state.

Florida also experiences high crash and fatality rates, and high rates of deadly “hit-and-run” crashes. Meanwhile, 20.4% of Florida drivers are uninsured. When they crash, everyone else must pay their bills.

Medical treatment costs for accident victims are rising in Florida, as are severe weather events that cause insurers to declare vehicles total losses. More than 100,000 vehicles were destroyed by Hurricane Ian last September.

Increases in distracted driving since Americans returned to the road following the pandemic caused 420,000 more crashes, 1,000 more fatalities, and $10 billion in damages in 2022 nation wide. More drivers are interacting with their devices, and more often, while on the road, contributing to a 23.4% increase in “screen interaction time.”

Florida rank by state for highest monthly premium: