JACKSONVILLE, Fla. – Some assisted living facilities and nursing homes have been forced to close due to escalating operating costs tied to Florida’s skyrocketing property insurance rates, according to data from Bloomberg.
Commercial property insurance prices have gone up right along with the price for people who own homes.
In a state that’s popular for retirees to enjoy their golden years, the facilities that house thousands of Florida seniors are facing increasing financial pressure just to keep their lights on.
Insurance premiums in Florida skyrocketed from 2018 to 2023. Bloomberg News reported that in 2023 alone, premiums surged by 27%, forcing some assisted living facilities to close.
“They just don’t have the budget to support such high levels of insurance premiums,” said Insurance Information Institute Spokesman Mark Friedlander.
Friedlander said the damage to commercial properties during a major hurricane, especially Hurricane Ian in 2022 was significant to all commercial properties within the impact zone. Friedlander said the costs to rebuild these facilities also went up dramatically.
“And then you have the other one, replacement cost, whether it’s homes or businesses, it’s gone up a cumulative 55%. That was based on data that the Institute measured from 2019 through 2022. So that impacts every type of property, whether it’s a single-family home, a nursing home, another commercial property, everybody’s rates are going to be impacted when replacement costs for property are going up 55%,” he said.
Friedlander said before the Florida Legislature held special sessions to address Florida’s property insurance crisis, fraudulent lawsuits wreaked havoc on the commercial properties industry, which was a big driver for new insurance legislation.
“These types of businesses are very prone to liability suits, class actions, a lot of very large verdicts, what we call in the legal world, nuclear verdicts. So that’s another factor at play when you talk about how commercial properties are rated,” he said.
News4JAX was unable to identify any nursing homes in North Florida that had to close under the pressure of the high price of property insurance, and we learned the financial impact has been felt the most at assisted living facilities during a change of ownership.
In Florida, there are more than 3,500 assisted living facilities experiencing the same financial stress as Florida families.
“We’ve seen this not only play out with the senior living type of facilities but also just individual families, retirees in Florida, who have dropped their home insurance because they can’t afford it anymore, which, obviously, is sort of frightening when you look at a forecast like the hurricane forecast we have for this season,” Friedlander said.
Nursing homes are protected more than Assisted Living Facilities in the state because they are regulated by the Florida Agency for Health Care Administration, and there’s a regulatory process in place to ensure there are enough beds to meet Florida seniors’ needs.