This Senate resolution recognizes that Florida's home insurance market faces severe stress from climate-related risks, particularly hurricane damage. The resolution highlights that major insurers have left Florida, leaving behind smaller and less financially stable companies to cover homeowners, with many of these smaller insurers having already failed. It specifically raises concerns about Demotech, a rating agency that gives high ratings to most Florida insurers but whose rated companies are 30 times more likely to become insolvent than those rated by competitors, creating a false sense of security. The resolution also notes that Florida homeowners face skyrocketing insurance costs, averaging $14,000 annually with rates up 34 percent since late 2022, and that the state-backed insurer of last resort could face a financial crisis if major hurricanes strike. Rather than direct legislation, this resolution calls on the federal mortgage companies Fannie Mae and Freddie Mac to scrutinize Demotech's rating practices and asks the Treasury Department to examine the risk that Florida's state insurance fund could require a federal bailout.
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