Collapse raises new fears about Florida’s shaky insurance market

For survivors of last month’s condominium collapse in Florida, sorting out complicated insurance payouts is but one part of starting over after a catastrophic loss. And other state residents may soon be feeling the shock waves from the tragedy, as spooked insurance companies begin scrutinizing the buildings they are covering, raising rates that are already among the highest in the nation, or canceling coverage altogether.

The collapse of Champlain Towers South in Surfside, which killed at least 97 people, is causing new turmoil in the state’s troubled insurance market, further jeopardizing a coastal housing economy that was already under pressure from climate change. And it adds to growing concern among economists about a new issue in the climate crisis: whether some parts of the United States are becoming too risky to insure, at least at a cost that most people can afford.

That shift has already started. Days after the collapse, insurance companies sent letters threatening to cut off coverage to older buildings that did not pass mandatory safety inspections. In California, insurers have begun fleeing fire-prone areas; in other parts of the West, officials say they are seeing similar reports of insurers refusing to renew policies.

And it is not just private insurers: In April, the federal government outlined changes to the heavily indebted National Flood Insurance Program that will eventually cause some people’s premiums to rise fivefold or more.

“Coastal areas all across the Gulf and up along the East Coast could start to see very similar dynamics” to what is happening in Florida, said Carolyn Kousky, executive director of the Wharton Risk Center at the University of Pennsylvania.

It is too soon to say whether climate change contributed to the collapse of the building in Surfside. But the effects of global warming, which include extreme heat and more moisture in the air, cause structures to deteriorate more quickly, according to Jesse Keenan, a professor at Tulane University who specializes in the consequences of climate change for the built environment.