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Homeowners are increasingly forgoing home insurance, gambling that the likelihood of a disaster isn’t high enough to justify the cost of a policy, the Wall Street Journal reported. Some skipping insurance say they are doing so because they can no longer afford the rising premiums. The national average for home insurance based on $250,000 in dwelling coverage increased this year to $1,428 annually, up 20% from 2022, according to Bankrate. Others, particularly among the wealthy, say they have enough money saved to rebuild or move elsewhere should their home be destroyed. The risks of forgoing a policy are significant. When you don’t have insurance and your home is destroyed by fire, you don’t just lose your house and its contents. You might also have to pay for removing your home’s remains as well as the costs to rebuild it. Few people can financially withstand the loss of an uninsured home, according to financial advisers. It is particularly precarious considering the high price to rebuild or buy a home in many areas of the country.

Cape Coral, Fla., was devastated by Hurricane Ian last year, but real-estate agents still pitch waterfront homes as “Gulf access haven.” Insurers take a different view. Home-insurance premiums are soaring in the Southwest Florida city, and there is evidence that the higher costs are starting to affect the real-estate market, the Wall Street Journal reported. Buyers’ concerns about insurance costs are slowing sales and causing some canceled deals in areas with particularly high flood or wildfire risks. Home-insurance companies are trying to claw back steep underwriting losses by hiking rates, or pulling back from disaster-prone areas such as Cape Coral. The average annual home-insurance premium for Floridians has tripled in five years, from $1,988 in 2019 to $6,000, according to the Insurance Information Institute, an industry group. The cost of flood insurance—mandatory for some in the Sunshine State—is rising faster still in many vulnerable areas. The federal National Flood Insurance Program, which provides most policies, recently changed its pricing to more closely tie premiums to risk. In Cape Coral, the average annual flood-insurance premium for a waterfront zip code has increased from $1,791 to $4,728 a year, federal data show.

Heirs of the late Art Van Elslander would tap business insurance policy proceeds and pay nothing out of pocket as part of a proposed $8 million settlement agreement with the trustee for the Art Van Furniture bankruptcy case, the Detroit Free Press reported. The tentative settlement, laid out last week by the trustee in federal bankruptcy court in Delaware, would end the trustee's lawsuit against the Art Van heirs and release them from future claims — if the judge approves the agreement. The settlement would also cover former Art Van CEO Kim Yost and the Boston-based private-equity firm Thomas H. Lee Partners. The Art Van family in March 2017 sold their furniture retailer to the private-equity firm in a complex $621 million deal. Nearly all of the settlement money is to come from the National Union Fire Insurance Company of Pittsburgh. National Union provided insurance coverage, including for breach of fiduciary duty claims, to former Art Van President Gary Van Elslander, Yost and various Thomas H. Lee Partners officials who sat on Art Van's board of directors, according to settlement documents.

A Florida state agency is selling municipal bonds to backstop the state’s homeowner’s insurance industry after a surge of claims and litigation drove some insurers to shutter, Bloomberg News reported. The Florida Insurance Guaranty Association, which handles the claims of insolvent insurers, plans to borrow $600 million of bonds, according to preliminary offering documents. It is the first time in three decades the agency has tapped the municipal bond market to help support insurance claims. The borrowing provides the agency with needed liquidity. “Our funding sources are somewhat limited,” said Corey Neal, FIGA’s executive director. Historically, the agency has used investment income and the assets of liquidated companies to cover payouts. The last time FIGA sold a muni bond for such purposes was in 1993 after Hurricane Andrew devastated South Florida, causing an estimated $27 billion in damages.

Anyone in Florida who has opened a home insurance bill in the last few years knows premiums have been skyrocketing. New estimates from a data analysis company shows they’ve actually been rising faster than in any other state — a lot faster, the Miami Herald reported. The numbers show just how massive the impact has been on the wallets of Florida consumers, with home insurance costs up about 57% since 2015, according to LexisNexis Risk Solutions. That’s nearly triple the national average (21%) and far outpaces Nebraska, the state with the second-biggest average home insurance hike (43%). Climate change may take some of the blame: Warming oceans and an altered atmosphere are making hurricanes more likely to rapidly intensify and may make stronger storms more frequent. A recent run of hard-hitting hurricanes has pushed several Florida insurers into insolvency. But there are also other, more mundane causes, according to insurance experts. Inflation has driven up the cost of materials and labor to repair or rebuild a house. Rising interest rates have raised the cost of borrowing for insurance and reinsurance companies. Developers keep building pricey homes in vulnerable floodplains and along eroding coasts. And new residents keep flooding to them, concentrating the state’s insurance risk.

A bankruptcy judge is allowing current and former officials with the parent company of Silicon Valley Bank to tap into the $210 million in insurance coverage available through directors and officers liability policies to defend themselves against litigation that followed the collapse of the bank, the Insurance Journal reported. The unsecured creditors' committee for the SVB Financial Group bankruptcy had objected to the expense, saying any insurance money spent on defending the directors and officers would not be available for other potential litigation or any settlements or judgments. The committee argued that the directors and officers aren’t entitled to any of the insurance proceeds because their own mismanagement caused the collapse of the bank. But Judge Martin Glenn, chief bankruptcy judge for the Southern District of New York, said the insurance policies themselves state that the banks directors and officers get first dibs on any proceeds from the D&O policies. “Even if it is true that the directors and officers do have liability, that is precisely why such insurance exists,” Judge Glenn said in an opinion released on Monday. “The Committee cites no legal authority for the proposition that directors and officers need to be ‘blameless’ to access insurance that is specifically intended to cover their defense costs and liability in these situations.”