As climate change-induced natural disasters make it increasingly hard for both residents and insurance companies to stay afloat in states like Florida, there are potential solutions that both insurance companies and governments must take. They should run various climate scenarios to know what weather is coming, create incentives for customers to fortify their property from damage, and incorporate climate risk into their policies.
While weather is undoubtedly a contribution, the main reasons insurance companies are in this predicament are because of lawsuits, fraud, and loose regulations. For example, contractors will offer to fix a roof if the homeowner signs over their insurance benefit; contractors are then able to file whatever claim they want, and when the insurer refuses to pay, the contractor sues. The majority of these claims and subsequent lawsuits are seen in Florida, which is why it is the worst state for home insurance.