THE PRICE OF SPRAWL INSTITUTE REPORT

Florida’s property insurance crisis is no longer simply a coastal problem. Insurance premiums are rising, private insurers are withdrawing from the market, and homeowners in some of Florida’s poorest inland communities are increasingly struggling to obtain or afford coverage.

The connection to the Price of Sprawl is straightforward: Florida has spent decades adding homes, businesses and infrastructure in areas exposed to hurricanes, flooding and other natural hazards while allowing the costs of that growth to be spread across the broader population.

The result is an insurance system in which homeowners who may live many miles from the coast can still pay for the financial consequences of development and risk elsewhere in the state.

Florida’s state-backed Citizens Property Insurance Corporation makes this connection particularly clear. Citizens exists as an insurer of last resort for property owners who cannot obtain coverage in the private market. While Citizens policyholders pay their premiums, Florida law also allows, and in certain circumstances requires, Citizens to impose assessments that extend beyond Citizens customers.

According to Citizens, if a catastrophic event leaves the company with a deficit, Citizens policyholders can first face a surcharge of up to 15% of their premium. If a deficit remains, an emergency assessment of up to 10% per year can be imposed on assessable property-and-casualty premiums statewide, including policies held by people who are not Citizens customers.

The risk may be concentrated on Florida’s coast, but the financial exposure can extend across the state.

Florida’s Insurance Crisis Has Moved Inland

Florida's insurance crisis is often portrayed as a problem for expensive coastal properties in places such as Miami, Naples and the Florida Keys.

But recent reporting shows a very different problem emerging in Florida's rural heartland.

An Inside Climate News analysis found that some of the state's highest homeowners insurance non-renewal rates occurred not in the most expensive coastal counties, but in Glades, Hendry, Highlands and Okeechobee counties around Lake Okeechobee. Florida had the nation's highest home-insurance non-renewal rates, reaching roughly 3% statewide in both 2022 and 2023.

These are not wealthy coastal communities.

Glades County, for example, had a median household income below $39,000, compared with approximately $72,000 statewide, according to the reporting. Yet residents in these communities are facing rapidly increasing premiums and difficulty finding coverage.

One Okeechobee homeowner profiled by Inside Climate News saw his annual insurance cost increase 180% in six years, reaching $4,742, before his policy was subsequently canceled. Another Okeechobee resident reported that his homeowner’s insurance had risen to approximately $6,000 per year.

This illustrates an important point:

Insurance risk does not stop at the coastline.

Hurricanes, tornadoes, flooding, severe rainfall and other storm impacts can reach deep into Florida's interior. As insurers reassess their statewide exposure, inland homeowners increasingly feel the consequences.

The Citizens Problem: Risk Is Shared

Citizens Property Insurance Corporation was created by the Legislature to provide coverage to Floridians who cannot obtain insurance in the private market.

Citizens is different from an ordinary private insurer because its financial structure includes a mechanism for spreading catastrophic losses beyond its own policyholders.

If Citizens suffers a deficit following a major catastrophe, its policyholders can face a surcharge of up to 15%. If additional funds are needed, Citizens can impose an emergency assessment of up to 10% per year on assessable statewide premiums. That assessment can apply to nearly every type of property-and-casualty insurance, including homeowners, renters, automobile, boat and pet insurance.

That means an inland homeowner who has never insured a beachfront property, and may never have lived near the coast, can nevertheless be exposed to costs generated by catastrophic losses elsewhere.

This is not a theoretical concept. Citizens itself warns policyholders that non-Citizens customers can be affected by emergency assessments.

Consider a $3,000 insurance policy.

Citizens illustrates that a 15% policyholder surcharge could add $450 to a $3,000 Citizens premium following a catastrophic event.

An emergency assessment could impose an additional statewide cost on assessable policies if Citizens' deficit remains.

The homeowner doesn't have to live on the beach to participate in this system.

The Hidden Subsidy of Florida’s Growth

This raises a larger question about the way Florida finances growth.

When development occurs in high-risk locations, the immediate economic benefits are concentrated:

• Developers sell homes and commercial property.
• Landowners receive higher land values.
• Local governments collect additional taxes and fees.
• New residents and businesses enter the community.

But the costs can be distributed much more broadly.

Those costs include:

Storm damage → insurance claims → insurer losses → higher premiums → insurer withdrawals → Citizens exposure → potential statewide assessments.

The homeowner living hundreds of miles from the coast can therefore become part of a financial system responding to risks created by Florida's overall pattern of development.

That is one of the clearest examples of the Price of Sprawl.

Growth Does Not Have to Be Cheap for the Developer

Florida's insurance crisis demonstrates why the state needs to look beyond the initial cost of development.

A new subdivision may generate millions of dollars in economic activity. But the true cost of adding those homes includes more than roads, schools, water and sewer.

It also includes risk.

Where are the homes being built?

How vulnerable are they to flooding?

What happens when the next major storm arrives?

How much will it cost to insure them?

Who will pay when private insurers leave?

And what happens when the state's insurer of last resort becomes responsible for an increasing concentration of high-risk properties?

These questions should be part of Florida's growth-management discussion.

The Poor Are Paying a Greater Price

Perhaps the most troubling aspect of Florida's insurance crisis is that the burden is increasingly falling on people who can least afford it.

Inside Climate News found that the inland counties around Lake Okeechobee were experiencing some of the state's highest non-renewal rates even though their insurance premiums generally remained below those of wealthy coastal counties. The problem is that residents in these poorer communities have less ability to absorb large premium increases.

The result can become a vicious cycle:

Higher premiums → homeowners drop coverage → lenders require coverage → homeowners struggle to maintain mortgages → properties become harder to sell → communities become economically less stable.

Residents without mortgages may simply decide to go without insurance.

That creates another risk: when the next disaster strikes, an uninsured homeowner has no private insurance company to absorb the loss.

The homeowner absorbs it personally, and local governments and taxpayers can ultimately be left dealing with the aftermath.

The Real Cost of a Florida Home

For decades, Florida has marketed itself as a place where people can buy a home and enjoy a relatively affordable cost of living.

But the purchase price of a home tells only part of the story.

The true cost of owning a Florida home increasingly includes:

• Mortgage payments
• Property taxes
• Homeowners insurance
• Flood insurance
• Deductibles
• Storm-resistant construction requirements
• HOA fees
• Special assessments
• Infrastructure costs
• Disaster-related repairs

When insurance premiums rise by thousands of dollars a year, the effective cost of homeownership rises dramatically, even if the home's purchase price remains unchanged.

For working families and retirees living on fixed incomes, insurance can become the deciding factor in whether they can afford to remain in their homes.

What Florida Should Do

The solution is not simply to subsidize insurance indefinitely.

Florida needs to confront the underlying economics of risk.

1. Make Growth Pay for Its Risk

New development should contribute to the infrastructure and risk-management costs it creates.

2. Stop Treating High-Risk Land as Low-Cost Land

Land that requires extraordinary public investment to protect from flooding or storm damage should not be treated as if it carries no additional cost.

3. Protect Natural Flood Protection

Wetlands, floodplains and other natural systems provide protection that reduces the cost of future disasters. Destroying them can increase both public infrastructure costs and private insurance losses.

4. Strengthen Local Control

Local governments should have the authority to determine whether additional development is appropriate given existing infrastructure and disaster risks.

5. Require the Full Cost of Development to Be Considered

A development approval should account for the long-term cost of roads, water, sewer, stormwater, schools—and insurance risk.

Conclusion

Florida's property insurance crisis is a warning that the state's growth model is becoming increasingly expensive.

The issue isn't simply that insurance companies are charging more.

Insurance companies are responding to risk.

The deeper question is who pays for that risk

.

When high-risk development continues to expand, the financial consequences do not remain confined to the people who choose to build or live in those locations. They can spread through insurance markets, Citizens Property Insurance, statewide assessments, taxes and the broader economy.

And increasingly, some of the hardest-hit homeowners are not wealthy coastal residents.

They are farmers, ranchers, retirees, working families and small-business owners living in Florida's rural and inland communities.

Florida cannot continue to measure the success of growth by how many houses are built while ignoring the cost of insuring those houses.

The real price of a new development is not just the cost of putting a house on the ground.

It is the long-term cost of protecting, insuring and rebuilding that house when disaster strikes.

That is the Price of Sprawl.

Key Sources: Citizens Property Insurance Corporation; Florida Office of Insurance Regulation; Inside Climate News analysis of Florida insurance non-renewals and premiums; U.S. Senate Budget Committee insurance data.