Climate change is having devastating effects in Florida, from rising sea levels and flooding caused by tides to toxic algal blooms and diseases, stronger hurricanes, wildlife extinction and disappearing habitat. Furthermore, it has reduced homeowners and communities' ability to afford protecting themselves against disasters.
Florida insurers have been forced to pull out due to losses they say are caused by climate change.
1. Farmers Insurance
Florida residents already face higher insurance rates as a result of climate change's increased severity in natural disasters, making these events more costly and lethal. Now Florida could lose even more insurers as they reevaluate their business models to account for this new reality.
Farmers announced in a memo to agents that it will no longer write new property insurance policies in Florida, citing rising "catastrophe costs and non-viable profitability as reasons. This move will impact about 100,000 Farmers-branded home, auto, and umbrella policies within Florida.
The decision follows years of losses in Florida, which was hit hard by hurricanes last year and expected to cause billions in damages, with homeowners seeing their premiums skyrocket as a result. Furthermore, climate change scientists have confirmed cyclones becoming stronger and more intense - placing Florida as particularly at risk in terms of hurricane risk.
Farmers has not announced its intentions regarding personal lines coverage such as renter's and motorcycle insurance in Florida, nor regarding auto-only policies including liability protection and collision damage waivers. Florida's Office of Insurance Regulation has received notification of Farmers' intentions to operate and is reviewing it further.
Michael Yaworsky was stunned by Farmers Insurance Company's decision. Representatives had promised an efficient effort in transitioning policyholders from Farmers to other companies during this period and plans on holding them accountable to that promise.
Other Florida politicians have strongly criticized this decision. Rep. Debbie Wasserman Schultz, Democratic Chairwoman of the House Insurance Appropriations Committee, accused Republicans of not doing enough to address this problem and pointed out that Florida's Republican-dominated legislature declined Democrat-suggested fixes that could lower premiums such as stopping one-way attorney fees and disallowing third parties from collecting payments directly from insurers for repairs.
Some solutions have been proposed, including creating a state and federally funded "Noah's Ark" to preserve coral chunks from dying ecosystems and an algae task force of marine scientists to address outbreaks in Florida's inland waterways, but such efforts pale in comparison to what Florida requires to lower emissions and deal with climate change's adverse impacts.
2. Liberty Mutual
Unmitigated global warming is fueling larger and more frequent wildfires in the West, intensifying hurricanes and typhoons, raising sea levels which increase storm surge and coastal flooding risks and contributing to greater storm surge risk. Florida is experiencing drought conditions and hotter, wetter temperatures as well as increased property insurance costs. But Florida is beginning to adopt climate solutions: A coral "Noah's ark" was constructed to preserve and study endangered reefs; Tidal Flood Prevention programs address rising sea level threats; Water management plans enhance inland water flow while decreasing saltwater intrusion; community groups leave fresh drinking water behind for Key deer as they leave lower elevation homes, known as climate gentrification;
Florida faces many hurdles to adopting ready-made climate solutions, with recent Governor Ron DeSantis being an obstacle. He appointed a climate chief but banned pension funds from considering climate change when making investment decisions, cut funding for climate-related research and even threatened to cancel out National Flood Insurance Program policies which are necessary as coastal regions experience rising seas and severe weather events.
Some insurance companies have already recognized the need for a stronger response to Florida's crisis, such as Liberty Mutual who aggressively dropped homeowners near Florida's wildfires and raised rates on homes near areas prone to increased flood risks, citing these measures as necessary and responsible due to "growing exposure to catastrophic losses."
Although insurance providers have access to the same data on climate change as government agencies, many providers remain defiant in their refusal to address the problem in spite of increasing public pressure. Progressive lawmakers and advocates are calling upon these providers to stop underwriting fossil fuel expansion, implement comprehensive carbon footprint-reduction strategies, and divest from fossil fuel investments.
Florida's insurance industry is slowly coming around to understanding the need to address Florida's climate crisis and implement policies that benefit customers, shareholders and the environment. Some firms have started to recognize global warming's growing threats by investing in green bonds or transferring mortgages from high-risk properties over to Fannie Mae and Freddie Mac, or setting targets for carbon reductions.
3. Travelers
Travelers, one of the largest insurers in the U.S., has announced it can no longer afford Florida's high premiums and is no longer viable to offer home and auto insurance in Florida. This decision affects around 100,000 customers statewide including Foremost Signature and Bristol West affiliate policies as well as those insured through Travelers affiliates Foremost Signature and Bristol West; FedNat had similarly shut down its home and auto operations there months prior.
National insurers have seen their costs skyrocket in Florida due to extreme weather and what the industry considers an overly litigious legal system, according to research group the Insurance Information Institute. Florida tops the nation in lawsuits filed against insurance companies; 79% of all property policy suits filed nationally against Florida companies have already been filed even with reform measures put into effect to reduce litigation abuse.
Climate change issues affecting Florida extend far beyond natural disasters; they also include environmental concerns affecting travel industry businesses and popular vacation spots. A report issued by the World Travel & Tourism Council revealed that travel industry emissions contribute significantly to global carbon emissions; they recommend setting targets aligned with climate science for decarbonization by 2050 along with ambitious mitigation and adaptation actions plans for their sector.
Attractive tourist spots across Florida are in danger, such as its famed coral reefs. Rising ocean temperatures cause coral bleaching - an irreversible process which results in weakening reefs that threaten marine environments and tourism economies that depend on them.
Florida's climate change crisis includes policies that disproportionately harm marginalized communities. In response to such legislation, which targets LGBTQ individuals and restrict reproductive healthcare access; repeal gun safety laws to allow untrained concealed carry; and foment racial prejudice - NAACP recently issued an earnest travel advisory against Florida under Republican Ron DeSantis's rule. The travel advisory follows several laws hostile to LGBTQ individuals such as restricting reproductive care access or restricting reproductive healthcare; repealing gun safety laws to allow untrained gun ownership ; repeal gun safety laws which allowed untrained concealed carry permits as well as fomenting racial prejudice.
4. United Property & Casualty
Insurance provider that sells auto and homeowners' policies in Florida cited "the projected continued escalation of weather-related disaster loss trends" as their reason for withdrawing. As reported by Tampa Bay Times, climate change is strengthening hurricanes; Florida being located at the end of Atlantic Ocean "hurricane alley" makes it particularly vulnerable.
Climate change has put insurers under strain, forcing up rates for both property and casualty coverage and raising catastrophe risks, which in turn is impacting local economies and forcing companies to divert capital away from other areas of their business; further disrupting markets with this market disruption which can force insurers out of certain fields or even result in them filing bankruptcy.
Climate change will drive up reinsurance costs and could make some products unprofitable or infeasible to offer, potentially increasing costs for both insureds and the general public. It could also alter asset values exposed to climate risks causing financial markets to reprice them resulting in higher costs for both insureds and public alike.
Not for the first time has a major insurer left Florida for similar reasons. State Farm, Florida's most widely held provider, left in 2022 following long negotiations over ever-increasing premiums and left over one million Floridians turning to state-run Citizens Property Insurance Corporation as their provider for assistance.
Many who remain are living in high-risk communities, such as Miami's Little Haiti neighborhood where low-income residents face rising sea levels and flooding from tidal surges; increasing mosquito and algal bloom diseases; the declining fishing industry; less productive crops, livestock and forests; real estate developers/speculators pushing out existing residents through climate gentrification processes.
Insurance provider withdrawals are more than a result of climate change; they're an indicator that Florida is headed into an insurable future, which must be prevented at all costs by taking action now on multiple fronts from building codes to greenhouse gas emission reductions.
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