Florida Residents Forced to Live Out of Their Cars as Home Insurance Costs Spiral Out of Control

By: Stephanie Bontorin | Published: Apr 27, 2024

In recent years, the number of people living out of their cars, vans, or campers as nomads has grown for a number of reasons.

In Florida, a new group of people living out of their vehicles is due to a surprisingly high cost: homeowners insurance.

Increasing Costs of Homeownership

In early March, NBC2 News published a story about the amount of homeowners camping out in their cars after being devoted homeowners for years.

A small house with white exterior walls and blue shutters sits behind a white picket fence

Source: Gustavo Zambelli/Unplsash

Due to the costs associated with mortgage rate hikes, inflation, and insurance, many people simply can’t afford to keep a roof over their head anymore.


Breakdown of the Price Hike

According to Insurance.com, homeowners in Florida pay about $4,419 for home insurance on a $300,000 home.

An outdoor mall with colorful streets, palm trees, and stores with outdoor seating is shown. Multiple people walk down the street on a nice day

Source: Dielmann/Pixabay

Compared to the national average of $2,601, residents in Florida have felt the pressure lately on their monthly bills.

Price Increases Are Out of Control

The monthly payment for insurance equates to about $368.25 at the lowest level. For many homeowners, the bills are stacking up.

A man and a woman sit behind a laptop on their desk and look worrisome at their bills

Source: Georgijevic/Getty Images

Expenses like dramatic increases in mortgage interest rates reached higher than 6-7% this year. Alongside mortgage payments and utility bills, many people just can’t pay anymore.

Many Floridians Are Forced To Make Dramatic Measures

When speaking to NBC2 News, longtime Floridian Ann Rose said that her car insurance is now her only insurance.

A woman drives her car while smoking a cigarette and wearing a bucket hat. A medium sized brown dog is sitting in the front seat of an older model sedan with blue paint.

Source: Giuseppe Mondi/Unsplash

After being forced out of her home due to rising costs, Ann has decided that living out of her car is the only option she has left.

Another Crisis on the Market

Due to the increased price, insurance buyers must now meet even stricter measures to be able to qualify.

A modest sized beige house sits on a well manicured lawn on a nice day

Source: Purdue9394/Getty Images

These tighter rules mean that although insurance costs have skyrocketed for some, others do not qualify for insurance at all and have to forgo buying a home at all.


The Issue Is Causing Many Retirees To Flee the State

Florida was once known as a safe haven for seniors to retire on pensions or modest budgets in a safe and warm location.

A senior couple walks along the beach with a large black and brown dog. The man wears a gray polo shirt, dark gray pants, large black sunglasses, and white sneakers. The woman is wearing a green sleeveless blouse with beige pants and white sneakers.

Source: Dougberry/Getty Images

The recent policy changes, along with an eye watering $1,000 hurricane deductible in case of tropical storm damage, has caused many seniors to move out of state.


Climate Change Feuling High Insurance Risks

Many scientists predict that Florida could be underwater by 2100, and that the lower third of the state will be completely unlivable.

A waterway with boat houses, boats, and palm trees on either side

Source: Martin Zangerl/Unsplash

Due to the increasing changes in weather patterns, rising tides, and unstable ground, insurance on the homes closest to the coast have felt the brunt of the price hikes.


Many Homeowners Already Living on the Edge

Some people living in hurricane prone areas already live with the knowledge that their house may not be a desirable purchase for a new family in the future.

A large, black storm cloud fills the sky over the water and coastal area. People are seen on boats in the water and palm trees and houses occupy the tip of the land

Source: Michelle_Maria/Pixabay

Along with the inability to pay insurance prices and premiums, many people know that they are taking a severe financial risk just by staying in the sunshine state.


Insurance Lenders Bogged Down With Bogus Claims

Another major issue contributing to the rising costs of insurance for homes is the wild amount of fraud and litigation happening in Florida.

Aerial view of a coastal residential area adjacent to a sandy beach with clear sky overhead

Source: Zachary Vessels/Pexels

As reported by the Florida governor’s Office, the state accounts for 79% of all insurance lawsuits by homeowners within the entire United States. A staggering number for a state that makes up 6% of the U.S. population.


Issues Have Caused Insurance Lenders To Go Under

Due to the issues finding safe homes to insure and the high level of lawsuits filed by homeowners in the state, insurance lenders have often been forced to close their business.

Brick building with a set of double glass entrance doors

Source: fstop123/Getty Images

Businesses that have stayed in the state have been forced to raise their rates, leaving the average homeowner in a tough position.


Creative Problem Solving

Many residents have chosen to stay in Florida but cut their costs dramatically by living out of their cars.

A man wearing an olive green t shirt rests his head on the steering wheel of his car

Source: Pixelshot/Canva

Insurers and lawmakers should be working together to solve the cost of living crisis to keep Florida affordable for the average family.


Historical Trends in Florida's Home Insurance

For decades, Florida’s home insurance rates have risen significantly due to frequent hurricanes and flooding. Historically, legislation and market demands have fluctuated, often leading to sharp increases in premiums (via HBKS Wealth Advisors).

A man holds up a form that reads “Insurance” with a pen pointing to the signature line

Source: Depositphotos

Understanding these trends is crucial for assessing the current crisis and predicting future shifts, providing context for today’s high costs compared to relatively stable prices in the early 2000s.


Rise of Alternative Insurance Models

In response to soaring costs, Floridians are increasingly turning to alternative insurance models. Peer-to-peer insurance and microinsurance offer more flexible, community-oriented solutions that can be cheaper and more tailored to individual needs (via NAIC).

A man and a woman shake hands over a wooden table after a business meeting

Source: Freepik

These models represent innovative approaches to mitigating risk without traditional insurers’ overheads.


Mental Health Impacts

The stress of financial instability and the drastic lifestyle change of living out of vehicles takes a significant toll on mental health.

A man looks extremely stressed while he holds his head in his hands

Source: Freepik

Experts highlight increases in anxiety and depression among displaced homeowners. Continuous uncertainty exacerbates these conditions, making mental health support essential for affected communities.


Physical Health Consequences

Living out of a car can lead to serious physical health issues as well, including chronic back pain, poor sleep quality, and reduced access to sanitary facilities.

A woman lying in a hospital bed. She has a canula inserted into her hand, with some of the lines from it having also been cellotaped to her hand.

Source: Stephen Andrews/Unsplash

Health professionals warn that such conditions can lead to long-term health problems, urging for immediate interventions to provide relief and support to those forced into these living situations.


Family Dynamics and Social Impact

According to the CDC, the pressure of high insurance costs disrupts family units, often leading to strained relationships and instability.

Man is clearly overwhelmed as he looks over his bills

Source: Freepik

Children face disruptions in their education and social lives, growing up in a constant state of uncertainty. This upheaval can have lasting effects on their development and future opportunities.


Florida vs. California

Insurance markets in Florida and California are diverging in response to climate disasters. California has seen insurers exit due to wildfire risks, impacting thousands of policies. Despite these departures being considered minor by the California Department of Insurance, the trend, including State Farm’s plan to cut 72,000 policies, highlights a growing crisis.

A shot of the LA skyline on a nice day. Multiple palm trees take up the view of the foreground

Source: shalunts/Getty Images

In contrast, Florida faces challenges from hurricanes and flooding, but the state’s response and insurer strategies differ markedly, leading to unique outcomes for homeowners.


Florida vs. Texas

In 2023, Texas saw a 22% spike in home insurance rates, doubling the national average due to a surge in billion-dollar disasters and rising rebuilding costs fueled by inflation and climate change (via the Texas Tribune).

An aerial view of a busy section in Houston, showcasing a multi-lane highway with moderate traffic. Adjacent to the road, various commercial establishments, including a McDonald's with its iconic golden arches, are visible

Source: Jose Losada/Unsplash

This major increase highlights Texas’s proactive yet costly approach to managing climate change impacts, contrasting with Florida’s ongoing challenges.


Predictions for the Future

Experts forecast that without significant intervention, Florida’s insurance market will continue to see price hikes, driven by climate change and increasing hurricane frequency (via Insurance Business Magazine).

An image of a man and a woman speaking with an insurance broker

Source: Freepik

These factors are expected to make insurance unaffordable for more residents, potentially leading to greater displacement.


Recent Bills and Proposals

Recent Florida legislation aims to curb the soaring insurance costs by enhancing state oversight and providing subsidies to lower-income homeowners.

Ron DeSantis in a black suit and red tie standing on a stage addressing a crowd through a microphone

Source: Wikimedia Commons

These measures are designed to provide immediate relief while encouraging long-term solutions to ensure the insurance market’s sustainability.


Successful Policy Interventions

Case studies from states like New York and Washington illustrate successful interventions in the insurance market, such as capped rate increases and government-backed insurance pools.

An image of a lawyer reading information from a sheet of paper

Source: Freepik

These examples provide potential strategies that Florida could consider to address its current crisis.


Seeking Sustainable Solutions

The challenge of high home insurance costs in Florida demands innovative, sustainable solutions.

The HCA Florida Mercy Hospital as seen from above

Source: HCA Healthcare Careers

It’s important for insurers, lawmakers, and communities to collaborate on comprehensive strategies that address both immediate needs and long-term stability. A collective effort is essential to keep Florida affordable and livable for all residents.


Seeking Collaborative Efforts for Insurance Stability

Bringing together insurance companies, government bodies, community leaders, and homeowners can help innovative solutions to stabilize the market. Such collaborations might involve creating more resilient building codes, implementing state-backed insurance pools, or offering incentives for homeowners to upgrade their properties against extreme weather.

A row of single-story houses with red-tile roofs and attached garages lining a quiet street in a sunny suburban neighborhood

Source: Filter Grade/Unsplash

These joint efforts can ensure a sustainable insurance landscape that supports Florida’s diverse population, mitigating the risk of more residents being forced to live out of their cars.