Florida’s home insurance market is on the brink of collapse, with active policies plummeting 78% over the past decade. A new analysis by Deep Sky Research reveals that the state’s insurer of last resort has skyrocketed from covering just 6% of the market to a staggering 63%. This distressing trend highlights a growing crisis as private insurers abandon Florida homeowners in alarming numbers.
With 2025 witnessing a relatively quiet hurricane season, concerns are mounting as Hurricane Melissa threatens to bring unprecedented damage to Jamaica. Deep Sky Research has identified crucial warning signs regarding the insurance industry’s ability to handle increasing hurricane risks across the United States, raising alarms for states like Florida.
The report, titled “Uninsurable: Florida’s Home Insurance Collapse Signals National Trend,” highlights that large portions of the state are becoming essentially uninsurable due to the retreat of private markets. Florida’s Citizens Property Insurance Corporation, initially intended as a temporary safety net, now provides coverage for the majority of homes in the state.
Max Dugan-Knight, a climate data scientist at Deep Sky Research, emphasized the severity of the situation: “The insurance crisis in Florida is the financial system’s early warning of climate catastrophe.” He quoted former California Insurance Commissioner Dave Jones, stating, “The canary in the coal mine is dead.”
From 2014 to 2024, the number of active home insurance policies drastically decreased from 3.2 million to just 710,000. Additionally, new policies written on a quarterly basis collapsed by 77%, dropping from 164,000 to 37,000. Despite average premiums soaring by 22% after inflation—now reaching $3,454 annually—insurers continue to incur losses and withdraw from the market.
The report identifies intensifying hurricanes as the primary driver of this insurance crisis, noting a 300% increase in extreme hurricane frequency over the past 40 years. It also points out that maximum rainfall amounts during storms have risen by 33%. Utilizing a comprehensive hurricane severity scale that takes rainfall and storm surge into account—not merely wind speed—the analysis indicates that the most destructive storms are becoming more prevalent and severe.
The report explains that most hurricane damage is caused by water rather than wind, citing rising sea levels that result in storm surges penetrating further inland. As warmer atmospheres hold more moisture, extreme rainfall events become more frequent and severe.
In 2024, payouts from the National Flood Insurance Program exceeded the total of the previous 14 years combined, driven primarily by Hurricanes Ian and Helene.
Deep Sky Research warns that the structure of Citizens Insurance creates a “hidden tax” burdening all Floridians. If catastrophic losses surpass the corporation’s $15 billion in reserves, Citizens can levy surcharges on all property and casualty insurance policies statewide. This means that even non-homeowners could face increased premiums as they contribute to the program’s recovery.
The implications of this crisis could extend beyond individual homeowners, with Deep Sky Research cautioning that the collapse threatens broader economic stability. Without affordable insurance, property transactions may stall, leading to a potential collapse in home values. National banks, holding hundreds of billions in Florida mortgages, could face heightened risks, and real estate investment trusts exposed to Florida’s market could see their valuations plummet. Additionally, municipal bonds backed by property taxes could face downgrades.
Economists characterize this as a “death spiral,” where escalating climate risks drive losses, leading insurers to exit the market, creating a cycle that accelerates instability.
“Time is running out,” cautioned Dugan-Knight. “One significant storm this fall could lead to catastrophic losses for thousands of uninsured homes in Florida. The insurance market has already delivered its verdict on climate risk, and the rest of the economy will soon follow.”
Previously, Deep Sky Research documented similar trends in California, where the state’s FAIR Plan policyholders more than doubled between 2020 and 2024 in response to increasing wildfire risks.
