2025-2026 Coastal Home Insurance Cost Projections

1. Where things stand now (2025 baseline)

County-level reality: Lee County

The Florida OIR’s 2025 stability report shows the average homeowners premium (including wind) in Lee County at about $3,631/year as of March 2025, up about 3.3% year-over-year. Lisa Miller Associates

That’s a blended number across all of Lee County — everything from inland Lehigh to waterfront Sanibel. In practice:

• Cape Coral / Fort Myers (non-beachfront) homes tend to hover around or somewhat above that $3.6k average, depending on:

  • Year built / roof shape

  • Distance to water / flood zone

  • Mitigation (straps, shutters, impact windows, etc.)

• Sanibel & Captiva usually run meaningfully higher than county average (barrier islands, higher wind/flood exposure, Ian loss history). Pre-Ian examples on Sanibel were already in the ~$6,000/yr range for larger homes, and post-Ian risk + reinsurance costs have only pushed exposed risks higher. Sanibel Real Estate Guide+1

At the state level, multiple sources peg Florida-wide averages for a $300k dwelling in the $5,300–$5,500/year range as of 2025, reflecting the state’s elevated risk and litigation history. Worth Insurance+1

Citizens & private-market backdrop

A few key structural pieces affecting 2025–26:

• Citizens rate cap (“glidepath”):

  • 2025: max 14% increase per policy

  • 2026: max 15% per policy, then stays there. FLOIR+1

• OIR-approved 2025 Citizens changes for primary homes range from –10% to +14%, territory-dependent. Public+1

• Recent legislative reforms + a quieter catastrophe year have slowed the bleeding: statewide average increases are running under 2% in some recent periods, and several insurers have filed for rate reductions or low-single-digit hikes. III+1

• At the same time, reinsurance is still expensive, and tariffs / material costs add upward pressure on claims severity and future rates. MarketWatch

Flood is its own (ugly) story

Separate from homeowners:

• After Ian, FEMA pulled Cape Coral’s long-standing flood insurance discount, causing an estimated 25% surge in NFIP rates for many policyholders. WUSF+1

• Barrier islands like Sanibel/Captiva have high NFIP/private flood rates and a long recovery path after Ian and subsequent storms. Yale E360+1

For this projection I’ll focus on homeowners (wind/all-peril) and note flood as a separate pressure.

2. Assumptions for 2026 projections

To keep this grounded, I’m using:

1. Baseline 2025 averages (illustrative)

   • Mainland coastal (Cape Coral / Fort Myers non-beachfront):
     $3,600/year (close to Lee County average). Lisa Miller Associates

   • Barrier island / high-exposure (Sanibel & Captiva, Gulf-front):
     $7,000/year (roughly ~2× county average; in line with higher-risk coastal markets and historic island examples). Sanibel Real Estate Guide+1

2. Macro trend anchor points

   • 2024–25 statewide: +1.5% to +2% average increase, much lower than prior years. Insurance NewsNet+1

   • Citizens caps: 14% → 15% in 2026 (sets a ceiling for many but not all risks). FLOIR+1

   • OIR data for Lee County showed +3.33% on homeowners YOY Mar 2024 → Mar 2025. Lisa Miller Associates

3. Policy environment

   • Reforms + new carriers and My Safe Florida Home grants (renewed with $280M in the 2025–26 budget) keep downward pressure for well-mitigated homes, especially roofs/windows. Kiplinger+2srqcoastalliving.com+2

   • But climate risk, reinsurance, and possible tariff-driven material costs keep an upward bias. MarketWatch+1

Given that, here are three planning scenarios.

3. Scenario projections for 2026 (vs 2025)

A. Low / “Stabilization” scenario

Quiet storm seasons, competition grows, reforms bite, mitigation credits widely used.

• Assumed 2026 change:

  • Mainland Cape Coral / Fort Myers: +0–3%

  • Sanibel / Captiva: +2–4% (still more volatile)

Using +3% as a planning figure for both:

This roughly lines up with OIR data showing low-single-digit countywide increases and some carriers already filing reductions. Lisa Miller Associates+2III+2

B. Base / “Cautious Normal” scenario

Typical hurricane activity, reinsurance slightly up, Citizens caps effectively anchor the market, but private carriers still price conservatively for coastal exposure.

• Assumed 2026 change:

  • Mainland: +6–10%

  • Islands: +8–12%

Using +8% mainland / +10% islands as midpoints:

This feels like a realistic “plan for this unless things break really good or really bad” band for 2026.

C. High / “Event + Reinsurance Shock” scenario

Major storm impacts SWFL or nearby coast in 2025/early 2026; global reinsurance prices spike; some carriers pull back or file for upper-end increases. Citizens caps hit 15%; private market pushes harder.

• Assumed 2026 change:

  • Mainland: +15–25%

  • Islands: +20–30%

Using +20% mainland / +25% islands as examples:

This scenario is not inevitable, but it’s useful for stress-testing budgets and advising higher-risk customers (older roofs, open claims, proximity to gulf). It’s structurally consistent with recent years where some Florida homeowners saw 20–30%+ year-over-year hikes in crisis periods. DontGetHitTwice+2EL PAÍS English+2

4. How Sanibel & Captiva differ from Cape Coral / Fort Myers

Even within Lee County, you can almost think of three micro-markets:

1. Inland / non-waterfront Cape Coral & Fort Myers

   • Generally near the county average if built 2002+ and with mitigation.

   • Strong candidates to benefit from My Safe Florida Home roof/window upgrades and new entrants returning to the market. Kiplinger+1

2. Gulf-access canals & riverfront (Cape Coral / Fort Myers)

   • Often 20–50% higher than inland depending on roof age, distance to open water, and flood zone.

   • More reinsurance-sensitive; some carriers carve out certain ZIPs.

3. Barrier islands (Sanibel & Captiva)

   • Frequently double or more the county average, with much tighter underwriting.

   • Post-Ian rebuilds, climate-risk repricing, and large prior losses keep pressure high. Yale E360+1

So for client-facing messaging, “Lee County average” is useful context, but your actual projections are going to be much more about:

• Roof age & shape

• Year built (pre- vs post-2002 and 2010 code changes)

• Elevation & flood zone

• Prior claims & carrier appetite

5. Flood premiums: directional notes for 2025–26

You probably don’t need a deep dive, but for completeness:

• NFIP allows substantial annual increases under Risk Rating 2.0, and with Cape Coral’s community discount gone, many households saw ~25% jumps immediately. WUSF+1

• On Sanibel/Captiva, between Risk Rating 2.0 and Ian’s loss history, flood is often:

  • A larger line item than HO for some lower-value older cottages

  • On a multi-year stair-step upward path

• For most households, a conservative planning assumption is 10–18%/yr flood premium growth in higher-risk zones unless/until FEMA or Congress changes the rules — but exact numbers are hyper-site-specific.

I’d talk about homeowners + flood as a combined “hazard budget” with clients so the sticker shock is framed correctly.

6. How to use these projections with clients

If you’re walking people in Cape Coral, Fort Myers, Sanibel or Captiva through this:

1. Show the range, not a single number

   • “If things stay pretty good, we’re talking about ~$3.7k on the low end; if we get a rough storm year, prepare mentally for $4.3k+” for a typical mainland home.

   • “On the islands, we’re realistically talking mid-$7k to high-$8k per year for 2026 on a $7k baseline.”

2. Tie mitigation to the low scenario

   • Position My Safe Florida Home and other upgrades as the path to staying near the stabilization/base bands instead of drifting into the high band. Kiplinger+1

3. Segment by carrier type

   • Private admitted: more volatility, but also where you’ll see some rate decreases and new appetites in 2025–26. III+1

   • Citizens: more predictable but gradually ratcheting up via the 14–15% glidepath and depopulation rules.

4. Do “what-if” budget planning

   • For each client, you can build a quick 3-row line:

     • 2025 premium

     • 2026 low (3%)

     • 2026 high (20% or cap)

   • Then layer in flood with similar low/high paths.