Florida Republican Is Trying to Cash in on State’s Insurance Crisis: Report

Florida is facing a homeowners insurance crisis.

The state has the highest premiums in the country, which has forced residents to give up their coverage, with some contemplating relocation and selling their properties. Meanwhile, several providers have bolted out of the state, blaming high costs as a result of increased risks brought about by more frequent extreme weather events in the state.

However, some see the situation as an investment opportunity. One of those is Republican state Senator Joe Gruters, the Miami Herald reported, who pitched an idea for a new homeowners insurance company to colleagues with a promise of a 165 percent return on investments over the next five years.

Faced with the homeowners insurance crisis, state officials have passed legislation to encourage new businesses to invest in the sector in the state. Earlier this year, new legislation was approved by Governor Ron DeSantis that supporters say will help bring down rates. But critics say there was no evidence that suits against insurance companies have helped jack up the costs of homeowners insurance, according to the Tampa Bay Times.

The company aims to write $475 million worth of insurance premiums by 2028, the Miami Herald reported, for an average customer premium of $4,775.

“We firmly believe that this venture presents an extraordinary chance to achieve
exceptional returns in an environment of change and growth,” the outlet quoted the company’s pitch as saying.

Newsweek reached out to Gruters via email for comment.

The crisis in homeowners insurance has also affected other states that have been hit hard by the increased frequency of natural disasters. California, Texas and South Carolina are facing similar challenges to Florida.

Nationwide, more Americans are noticing the jump in the cost of insurance for their homes.

“In the first half of 2023, homeowners and commercial property claims costs increased by 36% and 30% respectively [year-on-year], driven up by inflation and natural catastrophe losses,” according to the insurance giant Swiss Re. Homeowners loss was highest in over a decade, the company said.

“There is an estimated 20% less availability for insurance options than a year ago,” Swiss Re said.

In Florida, about 15 major insurance companies have ceased offering new plans in the state, providing an opening for new players to enter the market.

The pitch that Gruters sent to investors, according to the Miami Herald, suggested that “there lies a unique and lucrative opportunity for investors” looking to enter the business.