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Florida’s explosion in insurance premiums threatens to ground the state’s highflying housing market. Florida home prices soared more than 60% since 2019, according to real-estate brokerage Redfin, the Wall Street Journal reported. That rate has slowed more recently, and the state’s home prices in September edged up 2.7% over the previous year, Redfin said. While rising interest rates and the large price run-up are the biggest factors, higher insurance costs are starting to play a role, brokers say. Home-insurance costs are rising everywhere, but they are rising especially fast in Florida where premiums have tripled in the past five years. Some premiums have increased by about nine times what they were last year, according to Oscar Seikaly, chief executive of NSI Insurance Group, who said he has handled insurance premiums that cost as much as $600,000 a year for multimillion-dollar homes. In few places are soaring premiums more apparent than in Flamingo Park, where a combination of older, historic homes and ballooning property values have caused insurance costs to double for many homeowners in the past year. Even though the West Palm Beach neighborhood resides on a coastal ridge, where most of the homes are well above sea level and outside the flood zone, insurance rates for wind coverage are soaring there.

Hundreds of thousands of people nationally are signing up with state insurers of last resort as home insurers pull back from disaster-prone areas, the Wall Street Journal reported. More than 30 states have some form of last-resort plan for people who can’t get coverage elsewhere. Plans can be statewide or restricted to coastal regions. Coverage varies between states, ranging from all-perils policies to those that cover wind, hail or fire only. The plans were designed to be temporary safety nets. As the private market shrinks, however, the plans are becoming insurers of first, not last, resort in some high-risk areas. In Florida, the Citizens Property Insurance last-resort plan is the biggest home insurer in the state with 1.4 million policies. Florida, California and Louisiana have each seen policyholder numbers for their last-resort plans more than double within the past five years, according to plan representatives, and there’s no sign of a letup. The California Fair Access to Insurance Requirements Plan is piling on policies, adding what a spokesman called a historic 25,000 policyholders in August — more than three times the 7,000 monthly cap on new home policies Farmers Insurance imposed recently in the state.

Commercial property owners, already struggling with high interest rates and rising vacancies, face exploding insurance costs that keep hitting new highs, the Wall Street Journal reported. Natural disasters, inflation and a shrinking reinsurance market have pushed insurance premiums to record levels, echoing the surge in home insurance rates for much of the U.S. That leaves many landlords in a bind. Their building values and rental income are down, yet expenses keep rising. Commercial real-estate insurance costs have risen 7.6% annually on average since 2017, according to Moody’s Analytics. Those increases can result in hundreds of thousands of dollars or more in additional annual costs, depending on location and size of the property. They can be steep enough to wipe away a year’s worth of profits. While insurance premiums are rising virtually everywhere and for all building types, some cities have been particularly hard hit, especially for multifamily buildings. Costs to insure rental-apartment buildings rose 14.4% annually on average in Dallas, 13% in Los Angeles and 12.6% in Houston. Some owners struggle to find anyone willing to insure their buildings, Moody’s said.

A federal program that provides critical flood insurance is set to lapse unless renewed by the end of the month, potentially stranding new home buyers in need of coverage, the Wall Street Journal reported. The National Flood Insurance Program provides a safety net for the increasing number of communities that are vulnerable to flooding and might not have access to any other coverage. Now lawmakers are deadlocked over extending the program, which is facing a backlash over a new pricing model intended to make premiums better reflect a home’s risk. “The only thing worse than what we have is nothing,” said Sen. John Kennedy (R-La.), whose bill to extend the program by one year was blocked last week. Congress may find a way to renew the program before it lapses on Oct. 1 or shortly after, as in years past, through legislation that is either separate from or part of the budget fight to prevent a government shutdown. The deadline comes at a critical juncture for the 55-year-old program. The Federal Emergency Management Agency is being sued by 10 states that want to block the program’s revamped pricing, which was intended to help address its decadeslong funding shortfalls and to prevent homeowners in relatively low-risk areas from continuing to subsidize those in flood-prone ones. The new pricing will take several years to be fully implemented and result in rate hikes for two-thirds of the program’s 4.7 million policyholders, according to the Government Accountability Office. The states suing FEMA say the new rates could drive people out of flood zones, slam property values and even lead to people losing their homes because they can no longer afford insurance that is a condition of their mortgages.

Health-insurance costs are climbing at the steepest rate in years, walloping businesses and their workers, the Wall Street Journal reported. Costs for employer coverage are expected to surge around 6.5% for 2024, according to major benefits consulting firms Mercer and Willis Towers Watson. Willis Towers Watson projects the increase will be the biggest in more than a decade. Such a boost could add significantly to the price tag for employer plans that already average more than $14,600 a year per employee, driving up health-insurance costs that are among the biggest expenses for many American companies and a drain on families’ finances. For people who have individual insurance plans sold under the Affordable Care Act, premiums are also expected to rise by about 6% next year, according to public insurance filings analyzed by health-research nonprofit KFF, though that increase is comparable to this year’s.

UBS expects Hurricane Idalia to result in insured losses of $9.36 billion based on preliminary estimates, the brokerage said in a note on Wednesday, as destructive winds and rain lashed coastal Florida, Reuters reported. Idalia made landfall in the state as an "extremely dangerous" Category 3 storm yesterday after millions of residents evacuated or hunkered down in homes and shelters. UBS estimates a 50% chance of losses of over $4.05 billion and a 10% likelihood of losses of $25.6 billion, based on Aug. 28 data. The wide range accounts for potential changes in the storm's intensity and path. At about $10 billion, Idalia would cost insurers less than 10 of the costliest hurricanes to hit the United States. UBS said it expects reinsurers to absorb a meaningful amount of the loss at the upper end of the current range. Global insurers are facing a challenging 2023 as reinsurers hiked rates on key types of coverage by as much as 50% from July 1, blaming sharp losses from the Ukraine war and increasing wildfires and hurricanes hitting states such as California and Florida.