Reciprocal Insurers Fill Gaps as Traditional Firms Flee Hurricane Zones

As major insurers retreat from storm-vulnerable coasts, a bold new model is rising—but can it survive the next big hurricane? Experts weigh the risks.

, and Administrator

2025 November 22 . 8:00 PM

1 min read

As we can see in the image there are buildings, fence, vehicles, current polls, pipe and on the top... — As we can see in the image there are buildings, fence, vehicles, current polls, pipe and on the top there is sky.

Reciprocal Insurers Fill Gaps as Traditional Firms Flee Hurricane Zones

A new wave of insurance providers is spreading across hurricane-prone states in the US. These so-called reciprocal insurers—cooperatives owned by policyholders—are filling gaps left by traditional companies pulling out of risky coastal areas. Their rapid growth has raised concerns about whether they can cover claims after major storms. Reciprocal insurers operate differently from standard auto insurance providers. Instead of being structured as companies, they are formal agreements among groups who pool resources to insure one another. This model has gained traction in states like Florida, Louisiana, and Texas, where large insurers have reduced coverage due to high risks and lower profitability. Reciprocal insurers now hold a growing share of the property insurance marketplace in vulnerable regions. Their expansion comes as traditional companies retreat from high-risk areas. However, officials and experts continue to highlight the potential risks if these cooperatives cannot meet claims after a catastrophic event.