Editorial: Will. No Hurricanes Mean Insurance Bargains?

Keep your fingers crossed but it looks like no hurricane or tropical storm will pay Florida a visit this year.

Shouldn't that mean homeowners can expect a reduction in insurance premiums next year.

Yes, maybe, but probably not.

In the past, we've had insurance executives tell us that companies prepare for hurricane season by putting money away or taking out extra reinsurance to get them through any catastrophic storm.

It's smart to prepare.

After all, last year, Hurricane Helene caused close to $80 billion in damage. Hurricane Milton brought more than $34 billion in damage.

That's a lot of claims to settle.

Florida's homeowners insurance has been a topic of debate and frustration for years.

The Legislature passed some laws in 2022 it believed would help ease the dilemma. For the most part, we've failed to see any relief.

The average homeowner's insurance premium is $5,728 annually in Florida, according to Bankrate.

That's again third highest in the country behind Nebraska ($6,366) and Louisiana ($6,184).

We asked our representatives in the Florida House if no storms should mean lower rates.

Reasons for high rates

Only Rep. Venessa Oliver, R-Port Charlotte, responded.

"It's important to understand that insurance rates and premiums are not the same thing," Oliver said. "Rates are the underlying prices insurers charge for each dollar of coverage, based largely on factors such as reinsurance costs and actual hurricane losses.

"By contrast, a homeowner's premium, the amount they pay, is also affected by their replacement cost value. This means higher construction, labor, and materials prices can push premiums up even when rates remain flat.

"According to the Wall Street Journal, reinsurance costs have been one of the biggest drivers of Florida's insurance rate increases in recent years, as global reinsurers raised prices following multiple costly hurricane seasons," Oliver said. "While 2025's renewals showed early signs of relief, with risk-adjusted reinsurance rates roughly flat or slightly down, insurers still need sustained stability before filing for rate decreases."

Oliver said if the state is spared from hurricanes this year and maybe another year or so, reinsurance pricing may improve and that could "translate into lower rates, and eventually lower premiums, for Florida homeowners."

The reasons for our high insurance premiums are pretty obvious for the most part.

Hurricanes are the number one reason strictly because of the damage they can do. One big hurricane, much less two or three as we had in 2024, can put the limits on what insurance companies can afford.

But there are other things to consider.

Lawsuits are an issue

According to The Zebra online report and data from the Florida Office of Insurance Regulation, Florida sees a disproportionate number of homeowner lawsuits compared to other states. In 2019, nearly three-quarters of all such lawsuits filed across the country were in Florida — something our lawmakers have pointed out.

A 2017 state Supreme Court opinion is another issue. The opinion allowed attorneys to collect bigger fees when they won lawsuits against insurance companies, and some insurers believe this has created an incentive for more people to file suit.

State legislators passed laws aimed at reducing roofing-related price hikes in Florida.

Another problem that created a possible scandal uncovered by state media is the fact insurance companies in Florida can be charged for services by their parent and sister companies. An insurer's parent company can charge the insurer for commissions or can charge fees for handling claims.

Affiliates are questioned

There have been charges that the fees charged by affiliates are not for legitimate services but a way to siphon money from the insurer.

A Times/Herald investigation outlined how several companies were able to move profits to affiliates while claiming they were all but going broke. The action took place after a series of hurricanes struck Florida that moved the Legislature to pass laws protecting the insurance companies from lawsuits and giving them other benefits

The Times/Herald staff charged that insurance carriers were able to siphon more than a billion dollars in profits to parent companies even as some moved to leave the state, claiming they could not make a profit.

Insurance executives say the report is misleading and outdated.

We have not seen any evidence stemming from the Legislature following up on those allegations. But it is just another example of the complicated relationship between insurance companies, the Legislature, clients and financial giants that control it all.

So don't look for reduced rates if hurricanes pass us by. But keep hope that a second year of no storms might be the key to relief.

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