The Crisis of Florida Homeowners Insurance

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Florida Homeowners Insurance: 2025 Crisis, Costs & Smart Solutions

Florida homeowners insurance isn’t just a checkbox—it’s your safety net. Suppose you’re buying a home in Florida or already own one. In that case, it’s important to understand what’s happening in the insurance market. In this guide, we’ll explain why rates are rising, why some companies are leaving the state, and what you can do to protect your home and get a mortgage without stress.

Florida Homeowners Insurance Crisis Explained

In 2025, the Florida homeowners insurance crisis is affecting families across the state. Big storms, lawsuits, fraud, and company failures have made it harder and more expensive to insure your home. That’s why working with a trusted team like Gustan Cho Associates is more important than ever. We understand the crisis and help borrowers navigate it while staying mortgage-ready.

Why Is Florida Homeowners Insurance so Expensive?

Many ask, “Why is homeowners insurance so expensive in Florida?”

The answer starts with risk. The impact of hurricanes on Florida’s insurance market is massive. Hurricanes cause billions in damage. After every big storm, insurance companies pay out huge claims, driving up everyone’s rates.

Florida also faces problems like insurance fraud, especially from dishonest contractors and lawyers filing false claims. These add to legal costs, making rates go up for everyone. Add inflation and rising Florida reinsurance costs and homeowners’ premiums, and it’s clear why some people pay over $5,000 a year for coverage.

What’s Happening With Florida Homeowners Insurance in 2025?

Florida homeowners insurance is in crisis. Many insurance companies have left the market or gone out of business recently, and those still in business have raised their rates significantly, often by double digits. Several reasons contribute to this problem. First, the cost of hurricane damage has increased significantly, making claims more expensive. Lawsuits and fraudulent claims have also raised legal costs for insurers.

Because so many insurers have pulled out, Citizens Property Insurance Corporation—Florida’s state-run backup insurer—now covers over 1.3 million homes. While it fills a gap, questions remain about Citizens Property Insurance’s financial stability in a major disaster.

Hurricane Ian caused further instability in the insurance market, with record numbers of homeowners looking to last-resort insurer Citizens. In June of 2022, insurance provider Southern Fidelity went bankrupt and was liquidated. Soon after, in August, Weston Property & Casualty Insurance of Coral Cables also closed its doors and canceled all policies.

Additionally, reinsurance, which is insurance for insurance companies, has become pricier. Inflation has also caused construction costs to rise. As of 2025, Citizens Property Insurance—Florida’s state-run backup insurer—covers more than 1.3 million homes. This shows that many private insurers have pulled out of the market, greatly reducing homeowners’ options.

At Gustan Cho Associates, we help borrowers understand the pros and cons of Citizens Insurance versus private coverage and how that affects mortgage approval.

Insurers Exiting Florida Homeowners Market

Several insurers have gone bankrupt or exited the Florida market in the past few years. The Florida homeowners insurance carrier insolvencies list includes:

• Southern Fidelity (bankrupt in 2022)
• Weston Property & Casualty (liquidated in 2022)
• FedNat (pulled out)

These insurers exiting the Florida homeowners market make it harder for buyers to find coverage. Some are left scrambling with 30 days’ notice of non-renewal.

Legislative Fixes for the Florida Insurance Crisis

The state is working on legislative fixes for Florida’s insurance crisis, like limiting lawsuits and fraud, allowing arbitration over court cases, and encouraging new insurers to enter the market. But change takes time. Until then, Florida homeowners need innovative strategies to save money and stay insured.

How to Find Budget-Friendly Homeowners Insurance in Florida

Here are tips for how to find affordable homeowners insurance in Florida:

• Raise deductibles to lower premiums
• Bundle auto and home insurance
• Install storm shutters, security systems
• Get a wind mitigation inspection
• Maintain good credit

These tips to lower Florida home insurance costs can help offset rising premiums. Always compare at least 3 quotes, and consider working with experts who know which companies cover your zip code.

Hurricane Deductibles in Florida Home Insurance

In Florida, hurricane deductibles for home insurance are usually different from your regular deductible. They commonly fall between 2% and 5% of how much your home is insured for. For instance, if your home is insured for $300,000 and your hurricane deductible is 2%, you must pay $6,000 before the insurance helps with the rest. It’s important to know your deductible before a storm occurs.

Florida Insurance Fraud and Rate Increases

Fraudulent roof claims and unnecessary lawsuits have led to major Florida insurance fraud and rate increases. One bad actor can affect thousands of homeowners. That’s why reform is needed—and why your choice of insurer matters.

Effect of Sinkhole Claims on Florida Insurance Rates

Florida’s unique geology means sinkhole claims are another costly risk. Some counties have a higher risk than others. Frequent sinkhole claims can increase rates for everyone in the region. Ask your agent whether your home is in a known sinkhole zone and if coverage is included or excluded.

Role of State-Backed Insurers in Florida Crisis

The role of state-backed insurers in Florida’s crisis is growing. Citizens Insurance was meant to be a last resort, but now serves as a primary provider for many. It’s not always the cheapest or best, but sometimes it’s the only option.

At Gustan Cho Associates, we’ll explain how Citizens impacts your Florida homeowners insurance and mortgage approval.

Comparing Private vs Citizens Insurance in Florida

Let’s compare private vs. citizens’ insurance in Florida. Private insurers often have more flexible policies and lower rates in safe areas. However, they may deny coverage in high-risk zones. Citizens, while more available, may come with higher premiums and tighter rules.

We help you compare both to see which works for your situation.

Mitigation Credits for Florida Homeowners Insurance

You could snag some discounts on Florida homeowners insurance if you add features that help protect against hurricanes, like impact windows, roof straps, or stronger garage doors. These upgrades can really cut down your premium. Check with your insurer or agent to see what discounts you are eligible for.

Average Homeowners Insurance Premium in Florida 2025

The average homeowners insurance premium in Florida in 2025 is around $2,850 annually—about $237/month. That’s nearly 60% higher than the national average. In high-risk coastal counties, some are seeing premiums over $5,000.

Florida Insurance Commission Actions on Homeowners Crisis

The Florida Insurance Commission’s actions regarding the homeowners crisis include efforts to stabilize citizens, attract new carriers, and reduce legal abuse. We’re tracking these changes to help you make informed decisions.

Florida Coastal Property Insurance Market Update

In 2025, the Florida coastal property insurance market update shows growing risk and limited options. If you’re buying in places like Miami-Dade, Monroe, or Collier County, expect higher premiums and fewer choices. We’ll help you plan ahead so your loan doesn’t fall through.

Florida Homeowners Insurance and Mortgage Approval

Lenders require proof of insurance to fund your loan. Your mortgage may be denied if your insurance falls through or doesn’t meet lender guidelines. Gustan Cho Associates works with trusted partners who offer coverage in your area, even when others won’t.

We help you:

• Find approved insurers
• Estimate escrow for taxes and insurance
• Meet lender requirements
• Close your loan fast

First-Time Homebuyer? Don’t Get Caught Off Guard

If you’re buying your first home in Florida, get your insurance quotes early—don’t wait until closing week. Ask about wind inspections and bundle options. Florida homeowners insurance significantly affects your total monthly payment and mortgage approval.

Final Thoughts: Protect Your Florida Dream

Even in the middle of a crisis, there are still ways to get covered and close on your dream home. With the right support, you can manage the risks, reduce costs, and avoid last-minute surprises.

Gustan Cho Associates is your go-to mortgage team for navigating Florida’s tricky insurance landscape. We understand the issues, stay on top of state updates, and get you across the finish line with confidence.

Borrowers who need a five-star national mortgage company licensed in 50 states with no overlays and who are experts on Florida homeowners insurance, please contact us at at 800-900-8569, text us for a faster response, or email us at gcho@gustancho.com.

We say yes when others say no—even in Florida’s toughest markets.

Frequently Asked Questions About Florida Homeowners Insurance:

Q: Why do I Need Florida Homeowners Insurance to Buy a House?

A: If you’re getting a mortgage in Florida, the lender will require you to have Florida homeowners insurance. It protects the home from damage and helps make sure the bank’s investment (and your own) is safe.

Q: Why is Florida Homeowners Insurance so Expensive in 2025?

A: Prices are increasing because of big hurricanes, expensive repairs, more lawsuits, and fewer insurance companies willing to stay in the state. All of this makes Florida homeowners insurance harder to get and more expensive.

Q: What Does Florida Homeowners Insurance Cover?

A: Home insurance typically helps repair your house, covers your stuff inside (like furniture and electronics), and even covers medical expenses if someone gets hurt at your place. Some policies can also pitch in for a hotel if your home is unlivable after a storm.

Q: Do I Need Flood Insurance on Top of Florida Homeowners Insurance?

A: Yes, in most cases. Florida homeowners insurance doesn’t cover flooding, so if you’re in a flood zone (or even near one), you’ll need a separate flood insurance policy.

Q: What Happens if My Insurance Company Drops Me?

A: If your Florida homeowners insurance gets canceled, don’t panic. You can look for another company, apply with Citizens Insurance (the state-backed option), or ask Gustan Cho Associates to help you find a new policy.

Q: How Can I Save Money on Florida Homeowners Insurance?

A: Raise your deductible, bundle your home and car insurance, add security features like alarms, ask for discounts, and keep a good credit score. These steps can help lower your insurance bill.

Q: Which Companies Still Offer Florida Homeowners Insurance in 2025?

A: Some companies still offering Florida homeowners insurance include State Farm, Citizens Insurance, Universal Property & Casualty, Tower Hill, and Security First. Not all companies cover every area, so it’s smart to check with a local expert.

Q: Will Florida Homeowners Insurance Affect My Mortgage Approval?

A: Yes. You need proof of Florida homeowners insurance before your loan can close. Your lender wants to make sure the home is insured in case of storms or damage.

Q: When Should I Start Shopping for Florida Homeowners Insurance?

A: Start right after your offer is accepted or once you’re under contract. Comparing policies and getting approved takes time, so don’t wait until the last minute.

Q: Can Gustan Cho Associates Help Me with Insurance and a Mortgage?

A: Absolutely! Gustan Cho Associates helps Florida buyers get mortgage approval and find the right Florida homeowners insurance through trusted partners, especially when others say no.

This blog about “Crisis in Florida Homeowners Insurance” was updated on August 1st, 2025.