Households in Florida, the third most populous state in the US, have been grappling for some time with a property insurance crisis that is making home ownership unaffordable for many. After at least six insurers went insolvent in Florida last year, Farmers on Tuesday became the latest to pull out of the Florida market, saying in a statement that the decision was based on risk exposure in the hurricane-prone state.
They scream about how climate change is threatening the very existence of some parts of Florida, but the reality is simple - this is all about hurricanes and the staggering costs involved with rebuilding anywhere where costs are impacted by regulations and building codes.
The costs are already being felt by every Floridian - no matter where in the state they live. At the end of 2022, average annual property insurance premiums had already risen to more than $4,200 in Florida – three times the national average.
I've felt this myself even here in a part of Florida that's relatively hurricane-safe. My homeowners premiums have nearly tripled in just seven years.
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Fraudulent claims are a big reason for some of these insurance company departures. Another is that the State sets rates and even competes with insurance sellers via Citizens Insurance. If Companies could set rates without gubmint interference you might see more competition which would actually reduce rates on many policies. But the bottom line is that those of us who live away from the ocean are subsidizing those who live near the shore, especially in South Florida.
ReplyDeleteI just read somewhere that AAA has pulled out too.
ReplyDeleteY'mean people whose roofs have leaked for years have suddenly decided that Hurricane Ian done dood it!
ReplyDeleteand they've found adjusters (who've seen the many years of water stains) who'll back 'em up!
and of course the recent laws and regulations in Florida (signed by our [limited government Presidential candidate]) that were brought about by the collapse of Champlain Towers South in Surfside haven't added to this insurance company debacle!
We live in West Central Florida and have decided to just drop the insurance if it gets to expensive. Right now our home owners insurance is running -$2000- a year for a $250K wood frame home.
ReplyDeleteA tornado went through the North end of my neighborhood in January of 2021, taking off some roofs. September 2022, Hurricane Ian swept 6 feet of water through the neighborhood. The folks who had roof damage from the Tornado still did not have their roofs repaired before the hurricane! Insurance claims are slow walked while at the same time premiums are skyrocketing. I met with my agent when I noticed my car insurance went up $170 from the previous 6 months. I was told the State sets the rate...
ReplyDelete