Insurance Rates Could Be the Biggest Problem for Florida's Economy

You don't have to look for an incoming hurricane to find what experts call the biggest threat to Florida.

The future of the state's economy and real estate market could hinge on rising insurance rates. That's the finding of a new university of Florida study on real estate trends in the Sunshine State.

Researchers surveyed experts in the field ranging from industry executives to real estate lawyers, title insurers and market economists. The group identified the insurance crisis as the biggest trend in the statewide quarterly survey.

Results show even as the real estate market has been softening the impact of insurance could be enormous and long-lasting.

The busy 2004-2005 hurricane seasons sparked the rise in insurance rates but those increases haven't affected commercial tenants on a large scale yet.

When five or 10-year leases come up for renewal businesses will likely absorb costs by passing them on to consumers. Still, Florida's high growth rate may help insulate it against a dramatic drop in the housing market.