- Hurricane Ian killed more than 100 people and caused tens of billions of dollars in damage.
- Homeowners face rising insurance costs and the prospect that their property values could tank.
- It’s a reminder of the risks homeowners in Florida face from an ever-worsening climate crisis.
On Saturday, the Fort Myers, Florida, resident Silvia Roberts returned home to survey the damage from Hurricane Ian. When Roberts and her husband de ella purchased their two-bedroom mobile home for $135,000 in June, it seemed like a little slice of paradise just over 2 miles from the beach.
Now the lot is completely “uninhabitable,” Roberts said. They’d evacuated before the storm and anticipated some damage but returned to find the property covered in a thick, tarlike substance.
“We had all intentions of trying to get as much out as possible, even clothes and jewelry,” Roberts, 45, told Insider. “But within an hour and a half, we couldn’t breathe.”
The worst part: Roberts and her husband don’t have flood insurance. They were paying $750 a month for the lot in a mobile-home park and couldn’t fathom paying $7,200 a year for homeowners insurance, let alone additional protections for floods. (Flood insurance costs an average of more than $600 a year in Florida and can stretch even higher in high-risk areas.) Also, the mobile home they bought was built in 1989. It survived 2004’s Hurricane Charley and other big storms, so Roberts figured it’d weather Ian, too.
Roberts added that many of her neighbors were in the same predicament.
“Flood-insurance attainability has become nearly impossible for most middle-class Floridians,” she said.
Roberts, who works in operations at a preschool, and her husband, who lost his restaurant job because of the hurricane, are staying with family in the Miami area. While they hope to remain in Florida, they’re not sure they’ll buy a home again. Roberts estimates they’ve already lost $40,000 worth of personal belongings.
“Emotions have kind of gone up and down, but we’re hoping to stay,” she said.
Hurricane Ian, which killed more than 100 people, is far from the first climate disaster to strike Florida, and it won’t be the last. But the storm could mark a turning point as insurers and residents wake up to the true costs of owning and maintaining property in a state increasingly threatened by the climate crisis.
Florida’s homeowners face the daunting and gargantuan task of rebuilding, since most of the homes in Ian’s path, like Roberts’, did not have flood insurance, and aid from the federal government and local organizations likely won’t cover the tens of billions of dollars in estimated damage.
It’s a perfect storm of ominous circumstances that appear destined to worsen. First, residents in high-risk areas of Florida, already burdened by rising homeowners-insurance premiums, are almost guaranteed to see their flood-insurance costs rise dramatically in the coming years as insurers more accurately price risk under a new rating system. Second, home values could sink under the weight of higher ownership costs, according to one analyst who predicted the housing market’s collapse in 2008. Third, researchers who study how the climate crisis will affect storms say the threat of hurricanes and flooding will only increase from here.
In short, prospects are getting brighter for homeowners in the Sunshine State.
Insuring homes in Florida is getting more expensive, and there’s no end in sight
Across Florida’s six largest metropolitan areas, roughly 2.4 million coastal homes face flooding risk from a storm surge. But just 57% of those homes are covered by flood insurance, a Bank of America analysis of data from CoreLogic and the National Flood Insurance Program found.
That leaves more than 1 million homes in places like Miami, Tampa, and Jacksonville at risk of staggering losses from disasters like Hurricane Ian.
Getting flood insurance might seem like a no-brainer in a place like Florida, especially after Hurricane Irma battered the state in 2017. But a number of factors contribute to that dismal coverage.
Some owners may not even know that they need a separate insurance policy for flooding, assuming it’s covered by their homeowners insurance. Others, like Roberts, may be discouraged by the costly annual premiums — which are projected to rise for risky homes by thousands of dollars over the coming years.
The imminent insurance-premium hikes stem from the Federal Emergency Management Agency’s new method of rating risk for individual properties, which was overhauled a year ago.
Homeowners in high-risk flood areas are required to get flood insurance if they have a government-backed mortgage that’s owned by Fannie Mae or Freddie Mac. But flooding can extend beyond those federally designated areas, where residents may have been lulled into a false sense of security and therefore neglected to purchase the additional insurance.
Floridians are already saddled with the highest property-insurance costs in the nation, at an average of $4,321 a year, almost triple the national average, according to an analysis by the Insurance Information Institute, a trade group. Those costs are projected to grow as insurers compensate for the heightened risks of damage from climate disasters.
Flood insurance is an additional purchase that can cost hundreds a year.
The state’s insurers also face struggles that predate Hurricane Ian.
Roughly a dozen firms that provide homeowners insurance in Florida have gone under in the past two years, The Washington Post reported. Insurers who do operate there must deal with not only rising costs due to all the claims from climate-related damage but also a wave of litigation enabled by state laws that make it more lucrative for lawyers and contractors to sue insurers.
As a result, more and more insurers are declining to underwrite policies in the state. A lack of insurers willing to back homes in Florida is sure to drive up prices and make it more difficult for some homeowners to get the coverage they need.
All these costs could sink Florida home values
Property values may drop by as much as 50% in some areas of Florida when prospective buyers realize how much home-insurance premiums are expected to rise there, an analysis by DeltaTerra Capital found.
The investment-research and consulting firm is led by a former Wall Street analyst, David Burt, who predicted the 2008 housing crash. Burt was a consultant at Cornwall Capital, a firm that famously shortened the subprime-mortgage market in a feat chronicled in Michael Lewis’ book “The Big Short.”
In recent years, he’s been sounding the alarm on the widespread threat that flooding poses to the US housing market.
When flood insurers jack up premiums under FEMA’s new rating system, such increases, combined with the rising home-insurance premiums that Florida homeowners already pay, could make homes there much less attractive to buyers, Burt said. A New York Times story last year included an interview with one Florida resident who expected their flood-insurance premium to eventually rise from $480 a year to $7,147.
That doesn’t even include rising homeowners-insurance costs and the possibility of having to pay additional money out of pocket if climate disasters strike more frequently. The costs of renovations these days are through the roof, thanks in part to increased labor and material costs and supply-chain snafus.
“There’s going to be a lot less buyers,” Burt said, adding that some homeowners could end up “underwater on their mortgage.”
The climate crisis is worsening sea-level rise and flooding risk
As the climate crisis worsens and researchers adjust predictions, Floridians are becoming even more susceptible to extreme flooding events.
This year, FEMA adjusted its risk ratings for South Florida, saying its new conclusions “more accurately reflect flood risk” for future generations, and made even riskier areas more expensive.
In February, a National Oceanic and Atmospheric Administration report predicted that southwest Florida, including Fort Myers, would see sea levels rise by a foot in just 30 years. This kind of extreme jump previously took a century, occurring between 1920 and 2020, according to the report.
The rapid rise is, in turn, predicted to cause even more intense flooding during hurricanes and other weather events.
About 3.5 million people are in the path of coastal flooding in Florida, according to the climate nonprofit Climate Central. By 2050, the organization predicts nearly 1.1 million more residents will be vulnerable.
And the Gulf Coast areas where Ian hit should, sadly, brace for more pain.
“Southwest Florida is one of the most vulnerable areas we have,” a meteorologist at the National Weather Service told ABC7 in February.
George is Digismak’s reported cum editor with 13 years of experience in Journalism