Are Billions in Wind Mitigation the Answer for Florida’s Insurance Problems?

While Florida’s property insurance landscape appears to be leveling out, much more funding is needed to fortify homes against hurricane winds and prevent devastating losses for insureds and insurers, a few panelists said at the Florida Chamber’s Insurance Summit last week in Orlando.

“Mitigation is a huge issue. If you think about how do you reduce losses going forward – you harden homes,” said Charles Nyce, professor of risk management and insurance at Florida State University. “If the insurance companies don’t have to pay for the loss, that will reduce costs.”

Florida Gov. Ron DeSantis has proposed a state budget for next year that would provide another $107 million for the My Safe Florida Home program, which allows matching grants up to $10,000 for homeowners who harden their homes against wind damages, through stronger roof connectors and window and door protection. The hardening results in significant premium discounts.

But Nyce and others at the Summit said that’s not enough in a state that seems to be plagued by at least one major hurricane each year.

“It needs to be bigger. Much bigger,” Nyce said. He suggested that the mitigation program needs billions, not just millions, to be an effective force against property losses.

Former state Sen. Jeff Brandes, known for speaking out in recent years on the need for significant changes to Florida’s insurance laws, agreed. He said that the new funding for the popular home-hardening program doesn’t cover the full backlog of needy homeowners. At this funding level, it would take 554 years to secure all homes in the state, he argued.

“It’s just political theater at this point,” he said. The extra funding “is only enough to reach 85% of the people on the waiting list.”

Another panelist, a senior fellow at the James Madison Institute, a Florida think-tank, echoed the need for more practical hardening solutions. In legislative sessions in the past two years, Florida lawmakers have offered limited, state-backed reinsurance programs that have had little effect on rates, Christian Camara said.

“That to me was not a worthy investment of taxpayer resources,” Camara said. “But if the state is going to do something to lower insurance rates, I think it should be an investment into … putting more money into the My Safe Florida Home program.”

Hardening homes is the only way to reduce losses and reducing losses is the only way to reduce insurance rates, he noted.

Nyce argued that insurers themselves could take mitigation a step further. He urged Citizens Property Insurance Corp. leaders to consider requiring more insured properties to be fortified.

“You have a million policyholders. I would run through my book of business and see which of these homes have the biggest bang for the buck if I go out and harden them,” Nyce said. “They’re the homes that should be going to the My Safe Florida Homes program, right off the bat.”

The state of Florida is paying for the hardening and it will reap the benefits, he said.

Building new structures to current building codes has proven to make a huge difference for properties in the path of 2022’s Hurricane Ian, studies have shown. But older housing stock will be around for a long time, underscoring the need for retrofits on existing homes, he said.

The panelists did not address the need to elevate or remove many homes in low-lying areas that are vulnerable to the growing threat from storm surge and inland flooding.