Last Resort Property Insurance Is a Disaster for Homeowners

Insurance companies have a safety valve that can spare them some of the costs of disaster relief — but it comes at the expense of their customers.

An air tanker drops fire retardant behind homes in Chino Hills, Calif.

In 2022, Veronica Solomon worried about a $1,300 hike in the annual cost of her home insurance. “Am I going to be able to afford my house?” the South Florida resident asked.

Her premiums continued to soar, doubling in four years. No relief was in sight and she was running out of money. In fact, every one of the dozens of people that the local NBC station asked was concerned about whether they’d be able to keep their homes because of the soaring insurance rates.

There’s been a lot of pressure on state governments, which regulate insurance companies, to do something — anything — to hold down costs. But Florida is finding itself squeezed not only by the costs of big storms but also by the rates charged by the mysterious yet critical “reinsurance companies” that backstop the system — and that are playing a growing role in the rising costs of property insurance in risk-prone areas.