While this phenomenon is a National Issue, Florida and California are among the states experiencing the highest insurance rate hikes.

Why?

Weather related disasters, fraud and the legislative environment are all factors in these increases.  Florida is working to eliminate fraud and other insurance factors  legislatively.  Insurance industry leaders indicated that Florida’s legislative system has proven more effective than other states.

The statement highlighted that average annual weather-related catastrophe losses increased to $126 billion in 2022, marking the costliest three-year period on record according to the Global Federation of Insurance Associations.

Besides climate-related factors, the  American Property Casualty Insurance Association pointed out that societal pressures like economic inflation, legal system abuse, and regulatory restrictions are further complicating the insurance market.

What is the Solution?

In addition to fraud legislation, practical building standards are solutions to this issue.

Building codes and standards have been proven to prevent loss during hurricanes as evidenced by Babcock Ranch. https://www.resilientdesign.org/babcock-ranch-a-solar-town-proves-resilient-during-hurricane-ian/

Insurance brokers and underwriters are waiting to see the effects of the recent legislation.  The hurricane building codes will continue to prove effective as more structures are built though this is a slow process.  There is no question that Commercial Real Estate owners need to keep an eye on the Insurance market.