The wildfires in California this week have been among the most destructive in recent history, leaving entire neighborhoods in ruins and, unfortunately, taking the lives of ten people so far. The state is expected to suffer billions of dollars in damages, with much of this devastation impacting local families and their property. And while you might hope that each house is protected by insurance, that isn’t always the case. Some areas of America – including Florida and California – are experiencing an insurance market that is suffering in more ways than one.
Most people take insurance for granted. They hate the monthly bills, but they rely on insurance claims to help make it through tough times. But what happens if you can’t secure an insurance policy? Today, we are taking a look at some of the recent issues in California and what it means for us here in Florida.
Effect of Wildfires: What is Happening to California’s Insurance Market?
Basically, the California insurance market has become increasingly hostile to homeowners looking to protect their properties. Many major insurance providers have stopped offering coverage in wildfire-prone areas entirely, citing unsustainable financial losses due to the increased severity of fires. Homeowners dropped from their policies or denied renewals have been forced to turn to state-backed insurance programs or policies with limited coverage and steep premiums. Those who manage to secure insurance often face policies with higher deductibles and stricter terms, meaning rebuilding after a loss is still a painful chore.
Every house you see burned down on the news correlates to a family that must rebuild—a process taking months or years to complete. Florida homeowners are actually in a similar situation, and if your home is at risk, it’s time to take action to fix the issue.
Florida Faces Similar Insurance Challenges
You might not be aware of this, but Florida is facing similar issues in its homeowners insurance market. The hurricanes that swept through the state last year caused widespread destruction, with many homeowners still at a loss for how to rebuild. But going back even further, Florida has a history of insurers leaving the state or going bankrupt due to storms wiping out profits.
The Florida state-run Citizens Property Insurance Corporation, which acts as an insurer of last resort, has seen a sharp increase in policyholders as private insurers scale back. However, these policies often come with limitations and higher premiums, leaving homeowners underinsured or exposed to significant financial risks similar to California. Most Florida homeowners still have options for home insurance, wind protection, and flood protection, but the increasing cost trend is concerning for many.
The Risks of Underinsurance in Florida: Not Wildfires, But Hurricanes
The rising costs of insurance in Florida are not artificial, as they reflect the reality that paying out claims for at-risk parts of the country—which includes nearly every Florida county—is extremely expensive following massive storms. However, that doesn’t mean that forgoing home insurance payments and coverage is a good way to save money.
Without adequate coverage, homeowners cannot fully rebuild or repair their properties after a storm, and very few Floridians have the resources to rebuild their homes entirely out of pocket. You might hope a massive storm doesn’t hit the state for many years, but that isn’t a recipe for success. Many Floridians were caught off guard at the destruction of both Milton and Helene, and historically safe areas faced historic flooding and damage from wind.
Underinsurance impacts entire communities just as much as it impacts individual families. Homes left unrepaired or abandoned lower property values, disrupt neighborhoods, and slow the recovery process after a disaster. If you are concerned about your existing home insurance or need help securing a plan to protect your property, working with professionals can provide the peace of mind you need.
Don’t wait for the next hurricane or massive storm to strike Florida—contact Anderson & Associates Insurance Group today to find the best rates with our team and gain peace of mind as we enter another hurricane season in June of 2025.
