In recent years, extreme weather events supercharged by climate change have revealed how fragile the country’s property insurance landscape is — and how quickly insurance companies can go from profitable to nonexistent. In the five years between 2018 and 2023, more than 1.9 million home insurance policies were dropped in disaster-prone states like Florida, Louisiana, California, and Texas by insurance companies that either voluntarily withdrew from those states or went bankrupt. FedNat was one of seven Florida-based property insurers to go bankrupt during 2021 and 2022 due to insurmountable financial troubles. In Louisiana, 11 insurance companies were declared insolvent between 2021 and 2022.
The resulting scramble to secure insurance in high-risk areas often means homeowners face a daunting choice: high premiums in a private market that is loath to insure them, or limited coverage through state-mandated insurance programs that can cost just as much or more.
