The devastating impact of Hurricanes Milton and Helene has extended far beyond structural damage, leaving Florida’s title insurance in turmoil like countless other business sectors.
With mounting delays, declining transaction volumes and staff cuts, the industry faces a tough road to recovery.
Aaron Davis, CEO of Florida Agency Network, described the situation as unprecedented in an exclusive interview with The Title Report.
“Volumes are down in general,” he said. “And I would say the Gulf Coast is abnormal. You have activity, but some of that activity is saying, ‘I’m not going to fix my house; I’m going to sell it as is to investors for a low-ball offer.’”
Davis’ own experience mirrors the challenges faced by many homeowners. His beach house was heavily damaged by a hurricane last fall. Months later, he is still waiting for his insurance adjuster’s assessment.
“I have means to fix my house without insurance money, so I’m proceeding. But that’s not the case for everyone,” he said.
For homeowners without such means, the delays in insurance payouts have created a bottleneck in rebuilding efforts.
“I still do not have a building permit in my hand,” Davis said. “Now imagine if this is the majority of Gulf Coast inventory. You’re talking about thousands of people in the same boat, all waiting on contractors, permits, and materials.”
FEMA regulations compound challenges
One of the most significant obstacles is the Federal Emergency Management Agency’s (FEMA) strict guidelines on flood policies, which are capped at $250,000 per claim. Davis pointed out how these regulations have blindsided homeowners.
“If the cost to repair the damage exceeds 50 percent of the structure’s value, you cannot rebuild it as it was,” he said. “Let’s say your house is appraised at $500,000, with $250,000 in ‘assessed’ or ‘fair market’ value (the valuation basis can vary depending on county) . If the cost to repair your damage is $251,000, the city will require that you bring the structure up to current code. In some cases you could be forced to tear it down and rebuild it elevated to current standards, which could cost hundreds of thousands of dollars.”
This stipulation, often unknown to homeowners, has left many properties effectively condemned.
“In many cases the only option is to demolish and rebuild to meet new codes,” Davis said, explaining that new construction must elevate living spaces to around 8 feet above ground, but that too can vary by county. “This shift is part of a broader effort to eliminate uninsurable homes in flood-prone areas.”
Most homeowners’ insurance policies do not cover flood damage. While federal disaster assistance may be available when a flood occurs, it may be limited and is not guaranteed.
For residential dwellings, FEMA’s National Flood Insurance Program offers coverage up to $250,000 for building repairs and up to $100,000 for personal property. Non-residential properties are covered up to $500,000 for building repairs and $500,000 for damaged contents.
Economic ripple effects
Negative effects stemming from these challenges are being felt across Florida’s title insurance market. Transaction volumes in hurricane-affected areas have plummeted, as buyers hesitate to purchase in regions dominated by rebuilding efforts.
“Imagine you’re in a quaint beach town, and all you hear are hammers and saws from every house around you,” Davis said. “It takes the charm out of the experience. Restaurants and shops are struggling because people aren’t visiting, and local businesses that made these areas vibrant are closing down.”
One area’s entire title insurance staff was recently reduced to part-time hours due to the downturn.
“I’ve heard of agencies where everyone was put on part-time schedules for January,” Davis revealed. “The transactions just aren’t moving.”
The storms have also exacerbated Florida’s ongoing homeowners insurance crisis.
“You’re going to see more carriers pull out,” Davis warned. “The companies coming in to write new coverage only want newer homes. They don’t want to insure these little beach cottages that can be wiped out again next year.”
Florida has the most expensive insurance premiums in the nation. According to insurance data firm Insurify, Florida’s cost for property insurance falls around $11,000 a year on average.
In addition to stricter underwriting, FEMA’s policies include a “10-year exposure” rule, Davis said.
“If you rebuild and the same storm hits again, causing similar damage, your property may be red-tagged,” he said. “It could be condemned and demolished, and all your efforts to repair it will have been for nothing.”
Numerous studies show Florida’s property insurance has increased by nearly 75 percent since 2019, with homeowners who are unable to secure coverage going up four-fold.
In turn, millions of Floridians have turned to Citizens, a state-funded property insurance company established in the 1990s following Hurricane Andrew’s landfall.
Smarter, sustainable rebuilds
Davis believes the hurricanes have underscored the need for smarter rebuilding practices.
“When I rebuild, I’ll use fiberglass studs instead of wood, PVC boards instead of drywall, and elevate all electrical systems. I’m even considering vent systems on the ground floor to let floodwaters flow through,” he said. “These are the kinds of changes we need to think about.”
Newer construction codes have proven effective in withstanding hurricanes. Davis cited Mexico Beach, Fla., as an example.
“If you look at aerial photos after the last storm, most of the older homes were destroyed. But there was one house built a year ago that survived because it met new standards,” he said. “Global weather patterns are changing. We’re seeing snow in the Florida Panhandle and category 5 hurricanes hitting the Gulf Coast regularly. Everyone’s going to have to get smarter about preparation and rebuilding.”
However, Davis cautioned these measures will come at a cost.
“Stricter codes mean higher construction costs. And as FEMA tightens its policies, we may see fewer insurable properties, leaving more cash buyers who can afford to take the risk,” he said. “It’s a tough reality. But if we don’t adapt, these beautiful coastal communities may never recover fully.”