The cost of owning a waterfront home in Florida is going up fast.
Rick Ross. Diddy. Jennifer Lopez. These are just a few celebs who call Florida’s uber-exclusive Star Island home. While the multimillion-dollar Miami Beach enclave is known for being one of the most expensive neighborhoods in the country, the mega-mansions along this stretch of Biscayne Bay are also subject to climate-related disasters such as rising sea levels and tropical storms—including Hurricane Isalia, which rocked the Gulf Coast last month. As a result, well-heeled property owners are now being hit with five- to six-figure insurance policies to protect their coastal abodes, Bloomberg reported.
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“I’ve done this for 32 years, and I’ve never seen rates rise the way it’s happening today. If you’re getting a rate increase under 20 percent, it’s almost a gift,” Cindy Zobian, managing director at insurance broker Alliant Private Client, told Bloomberg. Zobian noted that increases of 800 percent are closer to the new standard. (Nope, that is not a typo!)
While not all Floridians are paying the same sky-high rate, the numbers are still way above the norm. The average premium for property insurance in Florida clocks in at $6,000 per year. For context, that’s a 42 percent uptick just this year, and more than three times the average rate nationally. While hurricanes and flooding are the main factors at play here, inflation is also causing rates to spike.
To put things into perspective, insurance rates across Florida have tripled over the past three years. The owner of a $50 million residence on Star Island was recently shopping around for a new carrier, and to his surprise, he was hit with an eye-watering $622,000-per-year quote. In another example, Chris Rim, a resident of one of Miami Beach’s low-lying man-made islands, got a $98,000 bill.
“Florida was the beginning,” Oscar Seikaly, chief executive officer at NSI Insurance, told the outlet. “But now, between the fires and the floods and everything else that’s happening, it’s trickling to other areas.”
Wildfires in places like Aspen and California are also causing home insurance premiums to climb. In the Golden State, major companies, including Allstate and State Farm, have even stopped selling owners new policies, blaming wildfire risks and soaring construction costs.
“Only wealthy Americans are going to be able to afford to buy homes in some of these coastal communities,” Mark Friedlander, a director at the Insurance Information Institute, told Bloomberg.
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