Florida Home Insurance Market Collapses 78% as Climate Risks Overwhelm System, New Report Finds

State insurer now dominates market; private insurers flee as hurricane intensity increases

MIAMI, Oct. 28, 2025 /PRNewswire/ -- Florida's home insurance market is collapsing, with active policies plummeting 78% over the past decade while the state's insurer of last resort has grown from 6% to 63% market share, according to a comprehensive analysis released today by Deep Sky Research.

2025 has been a relatively quiet hurricane season. But just as Hurricane Melissa threatens to do unprecedented damage to the island of Jamaica, Deep Sky Research has uncovered deeply alarming warning signs about the insurance industry's response to increasing hurricane risk in the United States. Hurricane season may just be gearing up and that will spell trouble for states like Florida as well as Jamaica.

The report, "Uninsurable: Florida's Home Insurance Collapse Signals National Trend," reveals that private insurers have largely abandoned Florida homeowners, concluding that large areas of the state are essentially uninsurable. Florida's Citizens Property Insurance Corporation—designed as a temporary safety net—now insures the majority of homes statewide as the private market retreats.

"The insurance crisis in Florida is the financial system's early warning of climate catastrophe," said Max Dugan-Knight, Deep Sky Climate Data Scientist, quoting former California Insurance Commissioner Dave Jones: "The canary in the coal mine is dead."

Between 2014 and 2024, total active home insurance policies dropped from 3.2 million to just 710,000. New policies written quarterly collapsed 77%, from 164,000 to 37,000. Meanwhile, average premiums increased 22% after inflation to $3,454 annually, yet insurers continue losing money and retreating from the market.

The report identifies intensifying hurricanes as the primary driver. Deep Sky Research's analysis shows extreme hurricane frequency has jumped 300% over four decades, with maximum rainfall amounts increasing 33%. Using a comprehensive hurricane severity scale that accounts for rainfall and storm surge—not just wind speed—the analysis reveals the most destructive storms are becoming more common and severe.

"Hurricane damage is primarily caused by water, not wind," the report explains. "Rising sea levels mean storm surges penetrate further inland, while warmer atmospheres hold more moisture, causing more extreme rainfall."

National Flood Insurance Program payouts in 2024 exceeded the previous 14 years combined, primarily due to Hurricanes Ian and Helene.

The report warns that Citizens' structure creates a "hidden tax" on all Floridians. When catastrophic losses exceed its $15 billion in reserves, Citizens can levy surcharges on all property and casualty insurance policies statewide, including auto, boat, and renters insurance, meaning even non-homeowners could face premium spikes to bail out the program.

Deep Sky Research warns the collapse threatens broader economic contagion. Without affordable insurance, property transactions freeze, potentially cratering home values. National banks hold hundreds of billions in Florida mortgages that could become distressed. Real estate investment trusts with Florida exposure would see valuations plummet. Municipal bonds backed by property taxes could face downgrades.

The report documents what economists call a "death spiral"—a self-reinforcing cycle where climate risks drive losses, insurers exit, healthy customers drop coverage, risk concentrates, and the cycle accelerates.

"Time is running out," Dugan-Knight concludes. "One big storm this fall could bring catastrophic losses to thousands of uninsured Florida homes. The insurance market has delivered its verdict on climate risk, and the rest of the economy will soon follow."

Deep Sky Research previously documented similar trends in California, where the state's FAIR Plan more than doubled between 2020 and 2024 due to wildfire risks.

About Deep Sky
Montreal-based Deep Sky is the world's first tech-agnostic carbon removal project developer aiming to remove gigatons of carbon from the atmosphere and permanently store it underground. As a project developer, Deep Sky brings together the most promising direct air and ocean carbon capture companies under one roof to bring the largest supply of high quality carbon credits to the market, commercializing and catalyzing carbon removal and storage solutions like never before. With $130M in funding, Deep Sky is backed by world class investors including Investissement Québec, Brightspark Ventures, Whitecap Venture Partners, OMERS Ventures, BDC Climate Fund, Breakthrough Energy Catalyst, BMO, National Bank of Canada, and more. For more information, visit deepskyclimate.com.

SOURCE Deep Sky