Florida builds extensively in high-risk flood zones amid rising insurance costs

Florida continues to build new homes in high-risk flood areas despite the increased frequency and severity of natural disasters, according to a recent analysis by First Street Foundation. Since 2019, the state has constructed 77,000 properties in these zones, leading the nation. This trend is raising concerns among insurers and financial institutions.

Morningstar DBRS projects that insurance costs for hurricanes Milton and Helene will range from $40 billion to $75 billion. These expenses are prompting insurers to raise rates and reduce coverage. "We build in some of the most silly places, knowing what could happen," said Andrew Siffert of BMS Group.

Robert Gordon from the American Property Casualty Insurance Association highlighted lenders' role in assessing long-term risks: “The lenders…are really in the best position to make sure there’s the right consideration of the long-term risk.”

Despite climate change warnings, developers continue building in vulnerable areas like La Linda Estates on Siesta Key. Realtor Dustin Anderson noted that these homes suffered no major damage from recent storms due to their concrete structure and compliance with Florida's design code.

However, Jeremy Porter from First Street pointed out discrepancies between official flood maps and actual high-risk areas: “Millions of people are at heightened risk of flooding in hurricanes, without the protection against that risk they would be afforded if flood zones were more accurate.”

Trevor Burgess of Neptune Flood suggested revising building codes for non-official high-risk zones: "Just go up a foot or so." Meanwhile, construction continues unabated in South Florida regions like Miami's Homestead area.