Insurance and Climate Repricing — The New Reality of Miami Carry Cost

If you have not bought property in Florida since 2021, the cost of insuring it has changed more than any other line item in the carrying calculus. Premiums have doubled, in some cases tripled. Several major carriers have exited the state entirely. The structural pricing of climate risk has, for the first time in two generations, become a primary variable in Florida real estate underwriting.

What has actually happened

Three forces are converging. First, a sequence of severe storm seasons in the Gulf and Caribbean has raised carrier reinsurance costs. Second, Florida's legal environment — assignment of benefits, litigation patterns — has historically produced loss ratios out of line with neighboring states. Third, post-Surfside (Champlain Towers, 2021) structural inspection requirements have changed the underwriting of older condo product specifically.

The result is an insurance market that has both repriced and contracted. Several private carriers have non-renewed Florida policies; the state-backed Citizens Property Insurance Corporation has become a fallback for a much larger share of the market than it was designed for.

What it costs now

Rough orientation for a luxury single-family in coastal Miami-Dade, 2025:

• Single-family, $5M replacement, inland Coral Gables: $12,000 to $20,000/year.
• Single-family, $5M replacement, coastal / waterfront: $20,000 to $45,000/year.
• Older coastal condo (pre-1990): special assessments and master policy increases are now the more material number.

How we underwrite it

We model insurance at the high end of current carrier quotes plus a 5% to 7% annual escalation for the hold period. We avoid building products with significant deferred capex on the structural envelope. We do not underwrite condo product built before 1990 without a full structural review.

On the upside, the repricing has already filtered into asset values for the marginal product. Trophy single-family in protected submarkets — Coconut Grove, Coral Gables — has been more resilient than the vertical condo market, where insurance and assessment uncertainty has weighed on pricing.

Frequently asked questions