I.I.I. Insurance Information Institute
Key Facts About Property Insurance

Contact: Lynne McChristian
I.I.I. Florida Representative
(813) 675-1054
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Property Insurance Premiums

Direct written premiums for private homeowners (multiple peril) insurance equaled more than $6.75 billion in 2006, excluding Citizens Property Insurance Corporation. By law, private insurers are unable to recoup past losses, so premiums must reflect what insurers expect to happen in the future. They use past data as a guide, along with a number of tools to forecast what will be needed to pay anticipated future claims.


Florida’s property insurance market produces small profits in most years and enormous losses in others. In 2001, Florida insurers reached a breakeven point which allowed them to erase the underwriting losses caused by Hurricane Andrew (1992). But the storms of 2004 and 2005 created another deficit.

Underwriting Gains/Losses in Florida Homeowners Insurance*
YEAR    Gain or (Loss)    YEAR    Gain or (Loss)
1992    ($10.6 billion)     2000    $1.43 billion
1993    ($210 million)     2001    $1.15 billion
1994    $690 million       2002    $1.38 billion
1995    $430 million       2003    $1.76 billion
1996    $860 million       2004    ($9.30 billion)
1997    $1.08 billion       2005    ($3.77 billion)
1998    $1.23 billion       2006    $2.96 billion
1999    $1.28 billion       2007    $3.40 billion
*does not include Citizens.

As the table above indicates, total claims payouts from four years with significant losses due to hurricanes have far eclipsed the profitable years. Over the past 15-year period, underwriting losses have exceeded premiums by an estimated $6.23 billion in Florida. 


On average, a hurricane strikes Florida every other year, with a hurricane of Category 3 or higher striking every four years. Nine of the top 10 hurricanes to hit the United States have impacted Florida. The largest hurricane to hit Florida was 1992's Hurricane Andrew, which caused $22.2 billion in insured damages (in 2007 dollars). Historically, private insurers experience a $20 billion event approximately every 10 to 12 years, most associated with hurricanes.

Coastal Exposure, Insured Value & Population

Total value of insured coastal property in Florida is $2.5 trillion, and that number is expected to double by 2014. In fact, property development along the nation’s coastlines has grown by 7.3 percent a year for the past three years, a rate that is expected to continue over the next decade. Nearly 80 percent of Florida’s total insured exposure is considered coastal property. 

Florida’s annual population growth rates are the highest among the Atlantic states, growing by 2.4 percent (compound average annual growth rate) in the period from 1980 to 2007, which is more than double the U.S. average. Florida’s population increased from 9.75 million in 1980 to 18.25 million in 2007. This increase represents an 87 percent growth rate over a 27-year period. According to the U.S. Census Bureau, Florida is expected to gain 12.7 million new residents between 2000 and 2030, the highest population growth among hurricane-prone states.

Insured Losses from Top Florida Hurricanes
Adjusted to 2005 Exposure Levels (in billions)
Homestead Hurricane (1945)        $20.0
Ft. Lauderdale Hurricane (1947)    $24.0
Hurricane Donna (1960)               $26.0
Okeechobee Hurricane (1928)      $33.0
Hurricane Andrew (1992)             $42.0
Miami Hurricane (1926)               $80.0
*Sources: AIR Worldwide; PCS.

Citizens Property Insurance Corporation

Citizens Property Insurance Corporation has historically provided property insurance to those unable to obtain coverage in the private insurance market. This state-run insurer provides multi-peril and wind-only insurance coverage to Florida homeowners, commercial residential and commercial business property owners. Citizens’ exposure to loss more than doubled by the first quarter of 2007, compared to year-end 2005. As of April 2008, Citizens had 1.2 million policyholders. Growth is flattening out as newly-formed insurance companies implement plans to take over policies covered by Citizens. Policy
count peaked in October 2007 at 1.4 million policyholders.

Insurance legislation passed in May 2007 expanded Citizens exposure base and made its rates competitive with the private market. In April 2008, legislation extended a freeze on Citizens rate increases until the end of 2009 and increased the value of homes that can be insured by Citizens from $1 million to $2 million.

Florida Citizens Exposure to Loss (in billions)
2002    $154.6
2003    $195.4
2004    $206.6
2005    $210.5
2006    $373.6
2007    $485.0
2008*    $439.0
*As of July

Insurance Information Institute
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New York, NY  10038
(212) 346-5500  www.iii.org

Florida address: 4775 E. Fowler Ave., Tampa, FL  33617