Florida Snagged Two-Thirds of National Flood Insurance Payouts in 2023

The National Flood Insurance Program (NFIP) paid out $913 million to U.S. homeowners last year, and $629 million of that went to residents in Florida. Major flooding from hurricanes and storm surges caused most of the payouts.

The Federal Emergency Management Agency (FEMA) oversees the NFIP, which is primarily funded through premiums and U.S. Treasury loans. The program was more than $20 billion in debt to the federal government as of 2022.

Florida has 1.7 million NFIP policyholders, amounting to $452 billion of total coverage, according to a 2024 NFIP report. The number of policies in the state grew by 2.8% since January 2023, increasing by 46,900 policies.

Florida homeowners face highest home insurance costs in the U.S.

Florida has the most expensive home insurance rates in the U.S., and those premiums don’t include the added cost of flood insurance. The average annual home insurance premium in Florida was $10,996 in 2023, and Insurify predicts a 7% increase in 2024. This would drive rates to $11,759.

Florida homeowners paid almost five times the yearly national average of $2,377 for home insurance in 2023. Louisiana had the second-highest annual premium at $6,354, nearly $5,000 less than Florida.

In addition, homeowners who want flood protection must purchase insurance separately through private insurers or the NFIP. The average annual NFIP premium in Florida is $958, according to FEMA data, above the national average of $888.

About 7.6% of Florida residents have flood insurance policies through the NFIP as of February 2024.

Climate change affecting sea levels

Florida had 194 flood events in 2023, according to the National Centers for Environmental Information (NCEI). High tides, heavy rain, and storm surges — made worse by rising sea levels — caused these events, according to an analysis from SeaLevelRise.org.

And the high costs continue year after year.

The NFIP paid out more than $629 million to Florida residents last year, but that total pales next to the $4.6 billion the NFIP paid out to Florida residents in 2022 following the devastation of Hurricane Ian. Florida accounted for 93% of claims costs the NFIP paid that year.

Legislation looking to turn the tide

As private insurers increase rates, declare insolvency, or pull coverage across the state, more homeowners have no choice but to buy coverage from Citizens Property Insurance Corp., Florida’s state-backed property insurer of last resort. Citizens’ average annual premium is $22,165 in 2024, more than double Florida's general annual home insurance average in 2023, according to Insurify data.

But the Florida Senate is aiming to help lower costs. It passed House Bill 7073 in March, which reduces property insurance premiums by more than $500 million statewide and includes a one-year premium tax relief on flood insurance policies.

“Every little bit helps,” state Sen. Kathleen Passidomo, R-Naples, said in a press release. “Cutting $500 million in taxes associated with flood insurance and property insurance premiums is important for families trying to make ends meet as our insurance market strengthens.”

In addition, Florida’s Office of Insurance Regulation announced in April that eight property and casualty insurers were approved to enter Florida’s insurance market. Those insurers include Ovation Home Insurance Exchange, Orion180Insurance Company, Tailrow Insurance Companies, and five more.

“Florida’s insurance market continues to strengthen, showing signs recent legislation is having positive impacts to the property insurance market,” says Michael Yaworsky, state insurance commissioner.

What’s next?

Florida is taking steps to promote market stability, and Citizens’ financial strength is improving. Both could lead to reduced home insurance premium costs, though Florida rates will likely remain high compared to the rest of the U.S. And weather experts predict another active hurricane season for this fall.

In March, Florida legislators approved extending the My Safe Florida Home program that provides grants and matching funds to homeowners making storm fortification improvements. The program also waives sales tax on the purchase of certain impact-resistant doors and windows.

Whether homeowners have the desire or means to move forward with improvements, the Florida Division of Emergency Management considers flood insurance a valuable investment. It reminds homeowners that flood coverage isn’t included in a standard home insurance policy, so having flood insurance can help protect homeowners from a future event.