Rising Insurance Premiums Squeeze Florida Waterfront Homeowners
Florida’s Gulf Coast homeowners are facing a new challenge in 2024: sharply rising insurance premiums. If you own a waterfront home in areas like Sarasota, Venice, or Nokomis, you’ve probably seen your insurance bills climb. Florida now has the highest average home insurance cost in the nation – roughly $5,000–$6,000 per year on a typical home, far above the U.S. average. In some coastal counties, the averages are even higher (Monroe County tops $7,000). These increases are creating sticker shock for Gulf Coast homeowners and adding stress to owning a piece of paradise by the water.
Why Premiums Are Skyrocketing
Hurricane risks and costly claims are a big driver. Florida has been slammed by numerous hurricanes in recent years, from Irma in 2017 to Michael in 2018 and Ian in 2022 – the latter now ranked as the most costly storm in state history. The insurance losses from these disasters have been enormous, forcing many insurers to raise rates or even exit the Florida market. In fact, Hurricane Ian’s aftermath drove over 30 insurance companies to pull out of Florida or go insolvent. The insurers that remain have tightened their underwriting: many dropped their riskiest homes and hiked premiums on everyone else. This has hit waterfront properties the hardest, since location matters – “the closer to water, the higher the rates” as one insurance expert explains.
Legal and regulatory issues have also played a role. For years, Florida’s property insurance market was plagued by excessive litigation and fraud. Amazingly, Florida accounted for 76% of all homeowners insurance lawsuits in the U.S. in 2021, even though it only had about 7% of the claims. These legal costs drove premiums up and scared away insurers. State lawmakers responded with reforms in late 2022 and 2023 to curb lawsuit abuse (ending one-way attorney fees and assignment-of-benefits schemes) and to shore up insurers with reinsurance support. These changes are gradually improving the market’s stability, but they have not yet brought down rates. At best, they may slow the pace of increases going into 2025. For now, homeowners are still seeing double-digit rate hikes on renewal, compounding what was already a crisis.
Impact on Sarasota and Gulf Coast Homeowners
In Sarasota and surrounding Gulf Coast communities, the insurance crunch is very real. Many homeowners report their premiums have doubled or even tripled in just a few years. Insuring a mid-range home (around $300,000 in value) in Sarasota or Venice can cost on the order of $6,000+ per year today, whereas an equivalent home in inland Florida might pay a fraction of that. Older waterfront houses are especially expensive to insure – not only do they face high windstorm rates, but they may also need separate flood insurance, which is rising in cost under FEMA’s new Risk Rating 2.0 system. (Flood premiums for some coastal homes are slated to double or triple over the next several years.) All of this adds to the cost of owning property near the water.
Homeowners with mortgages have little choice but to carry coverage, and even cash buyers are strongly advised to insure given Florida’s weather risks. Yet some frustrated owners are opting to go uninsured, essentially “self-insuring” their homes, despite the huge risk. An estimated 1 in 5 Florida homeowners has dropped insurance – a trend driven by those premium increases. As a real estate professional, I strongly advise against going without coverage (one major storm can be financially devastating), but it shows the level of desperation. More commonly, people are shopping around for any insurer that will take their home or turning to the state’s backup option, Citizens Property Insurance. Citizens – Florida’s state-run insurer of last resort – now covers over a million policies, including many in our area that private insurers wouldn’t renew. It often offers somewhat lower premiums, but it comes with coverage limitations and efforts to depopulate its rolls back to private companies. In short, waterfront homeowners are feeling the squeeze from all sides: higher wind coverage costs, higher flood costs, and fewer insurance companies willing to write policies on high-risk properties.
How Homeowners Are Coping (Solutions and Workarounds)
Despite these challenges, there are a few strategies and emerging solutions that Gulf Coast homeowners are exploring in 2024–2025:
Hardening Homes to Reduce Premiums: Many owners are investing in wind mitigation upgrades to strengthen their houses against storms. Florida law requires insurers to offer discounts for features like hurricane straps, impact-resistant windows, and new fortified roofs. Upgrading an older waterfront home can not only better protect it during a hurricane but also earn significant premium credits (sometimes cutting the wind insurance portion by 20–50%). Programs like My Safe Florida Home provide free wind inspections and even grants to help fund these improvements, which can make a home more insurable. Homeowners are also choosing higher deductibles to lower their annual premium – essentially agreeing to pay more out of pocket if a storm hits in exchange for savings each year.
Shopping the Market and Using State Options: It’s more important than ever to shop around for coverage. Don’t assume your longtime insurer is still the best or only choice – several new insurance companies have entered the Florida market as reforms take effect, and some existing insurers have filed to slightly lower rates or at least slow increases. An independent insurance agent who knows the Sarasota area can help you get multiple quotes, including from smaller or regional carriers that might be writing new policies. For those who cannot find a private insurer, Citizens Insurance is a critical safety net. While Citizens has its downsides (and eligibility requirements), it has capped rates and can keep you insured when no one else will. Some homeowners are also bundling their home and flood insurance with the same carrier or taking other steps to secure any available discounts. The bottom line is to explore every option – the landscape is changing, and new opportunities to save on premiums do pop up as the state tries to fix this crisis.
As a real estate agent, I understand how concerning these insurance costs can be for homeowners and buyers alike. The good news is that Florida’s government and insurance regulators are actively working on the problem, and we’re starting to see hopeful signs of stabilization. New laws and incoming insurers could gradually make coverage more available and affordable over the next year or two. In the meantime, by fortifying your home and staying informed on your insurance options, you can weather this storm. Owning a waterfront home in Sarasota or Venice is still a dream for many – and with the right precautions and advice, we can help keep that dream attainable even in a tough insurance market.
