Florida Governor Ron DeSantis (R) has had a busy year. He has enacted legislation prohibiting teachers from acknowledging the existence of LGBTQ people. He has banned private businesses from conducting trainings about racial bias. And he has flown dozens of migrants from San Antonio, Texas to Martha's Vineyard, Massachusetts, under false pretenses. 

But while DeSantis was fighting the culture wars and positioning himself for a future presidential run, he has failed to meaningfully address one of the state's biggest problems: its dysfunctional and collapsing property insurance market. 

Florida's property insurance system was in crisis even though the state had not been struck by a major hurricane since 2018. Then Hurricane Ian slammed into Florida's west coast, killing at least 74 people and inflicting tens of billions of dollars in property damage. Things are about to get much worse. 

Florida property faces catastrophic risks from weather events that worsen each year due to climate change. For years, many of the nation's major insurers have wanted little to do with covering property in Florida. Currently, State Farm covers 8% of Florida’s home insurance market, but "no other major national insurer has more than 4%." 

That leaves Floridians reliant on thinly-capitalized local insurers with very high rates. Floridians pay an average of "$4,231 a year per [property insurance] policy, compared to a US average of $1,544." Premiums have increased as much as 30% per year. Nevertheless, these companies are having a hard time surviving. In the last five years, six Florida insurance companies have gone out of business "without responding to a hurricane, and four more are in the process of liquidation." 

The collapsing market has left many Floridians reliant on the Citizens Property Insurance Corp., a state-run agency that is supposed to be the "insurer of last resort." It now provides property insurance for more than 1 million Floridians. But Citizens has limited resources. It currently has $13.5 billion available to pay out claims — a pool of money that will be depleted, if not exhausted, by Ian. If Citizens runs out of money, Florida law "allows [Citizens] to assess non-customers to pay out claims." 

This assessment, known as a "hurricane tax," would result in increased costs for Floridians that don't even own homes but carry auto, renters, or other forms of insurance. Florida State Senator Jeff Brandes (R) warns that Floridians could "see rate hikes of up to 40% next year as a result of Ian." 

DeSantis' giveaway to the insurance industry

In May, DeSantis called a special session, purportedly to address the property insurance crisis. The session resulted in lowering the threshold for the industry to access taxpayer-financed reinsurance by $2 billion. This publicly-financed reinsurance, known as the Cat Fund, offers reinsurance for about one-third of the price of reinsurance on the private market. (The Cat Fund can offer lower prices because it is exempt from taxes and doesn't have to worry about turning a profit.) The Cat Fund helps companies affordably cover catastrophic losses, avoid insolvency, and potentially lower premiums. 

While providing more access to affordable reinsurance could help stabilize the market, the scope of the program was much smaller than consumer advocates supported. Moreover, the law provided "no guarantees" that the savings created by the taxpayer-financed reinsurance program would be passed to consumers. 

Advocates warned it was "an industry bail-out that won’t result in savings to consumers." And that's exactly what happened. Despite the reinsurance fund, many insurers continued to apply for double-digit rate increases. "Florida insurance firms, not homeowners, reap the benefit of $2 billion taxpayer-financed fund," the Orlando Sentinel reported on August 1. 

Follow the State Farm money

Why didn't DeSantis take more robust action in May to shore up the property insurance market? Strengthening the public reinsurance fund was opposed by "large insurance companies that can buy reinsurance from their own subsidiaries and wouldn't benefit from the proposed reforms." 

That opposition was reportedly led by State Farm, the nation's largest insurer. State Farm is also a major donor to and fundraiser for DeSantis. On August 1, 2022, DeSantis collected "nearly 200 separate checks from insurance agents or their firms," totaling about $150,000. The effort, according to Politico, was "coordinated by State Farm." DeSantis met with the State Farm agent who spearheaded the effort and received the checks personally. Overall, DeSantis has received at least $700,000 from the insurance industry this cycle. 

State Farm also partially owns RenaissanceRe, a private reinsurance company. The private reinsurance industry opposes strengthening Florida's public reinsurance fund because it cuts into their profits. 

Another way to stabilize the insurance market is to fortify and expand Citizens Property Insurance Corp.and allow more Floridians to access its coverage. But this is opposed by the Florida Chamber of Commerce, which represents State Farm and other major insurers. Instead, the Florida Chamber of Commerce is advocating for the legislature to raise Citizens' rates, which would also allow private insurance to jack up prices. 

For more in-depth coverage of Florida property insurance, check out Seeking Rents, a newsletter by Florida investigative reporter Jason Garcia. 

The long-term cost of climate change denial 

Florida's property insurance market could be strengthened in the short term. But, ultimately, the intensifying crisis is inextricably linked to climate change. Unless global warming is curtailed, it will be impossible to manage the risks to Floridians and their property. 

DeSantis has made some investments to improve Florida's resilience in the face of rising sea levels and stronger storms, including a $150 million fund to provide grants to homeowners for hurricane retrofitting. 

But DeSantis has shown no willingness to address the root of the problem and has sought to block others in the state from addressing climate change. For example, last year, DeSantis signed a bill that blocked Florida cities and towns from transitioning to 100% clean energy. DeSantis also successfully pushed a resolution to prohibit Florida's pension fund from considering the impacts of climate change in its investment decisions. 

In December 2021, DeSantis was asked by a reporter what he was going to do to address climate change. "What I’ve found is, people when they start talking about things like global warming, they typically use that as a pretext to do a bunch of left-wing things that they would want to do anyways," DeSantis said. "We’re not doing any left-wing stuff."