States Pick Up Some Wind and Flood Risk for Homeowners/Underwriters Rely on Sophisticated Risk Analysis Tools to Set Rates

Homeowner’s insurance underwriters in the U.S. have significantly restricted the extent to which they provide coverage. This trend began as a result of huge losses suffered due to disasters such as hurricanes. It is also a result of vast homeowner policy claims for mold damage, particularly in southern states. A number of insurance firms have ceased offering coverage in Florida and Louisiana. After hurricane Andrew, Florida legislators attempted to utilize innovative ways to maintain the availability of homeowner’s insurance policies. For the period between 2020 and 2023, insured damage from storms, wildfires and other natural disasters in the U.S. exceeded $90 billion each year according to Aon. Losses from hurricanes were massive again in 2024.

The state of Florida set up two state-sponsored insurers of last resort that provided windstorm coverage to homeowners who otherwise could not obtain wind coverage in the private market. Later, the state set a limit on the rates that could be charged for homeowner’s windstorm insurance and established the Citizens Property Insurance Corp. (CPIC) to cover homes for wind, hurricane and hail damage that insurance firms wouldn’t cover at the capped rates.

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States Pick Up Some Wind and Flood Risk for Homeowners/Underwriters Rely on Sophisticated Risk Analysis Tools to Set Rates, Business and Industry Trends Analysis

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