democratic response to florida insurance crisis

[lazygood4nothinbum]

http://stormingmad.com

During the recent legislative session, the Legislature could have changed the tide and adopted an approach that would have led to a stabilized market and lower premiums.  Instead, they sided against homeowners and  with  insurance companies.  The legislation that passed guarantees increased  premiums  for homeowners  and it allows insurance companies to raise rates without  proper  justification. Worse, the legislation does not bring stability to Florida’s insurance market. At the end of the day, the Legislature  assured you pay more, much more, while insurance companies profit more.

 

[Cut-Throat]

Sounds good to me! -- If people want to live in a hurricane zone, they should have to pay. If the premiums get too high, then other insurance companies can come in and get a piece of the action by offering lower prices.

I think this is what everybody claims they like here. Capitalism.

 

[maddythebeagle]

so what do they want...florida to put caps on rates...which probably would result in insurance companies leaving the state...?

 

[d]

i seem to recall considerable concern several months ago that insurance companies were pulling-out of florida ...

 

[lazygood4nothinbum]

ya, the insurance companies are pulling out on our houses, but they have no problem taking our money on our liability, health, automobiles, etc. you know, the easy money.

i can't even imagine what would happen if insurance got to where no one can afford it. what of all the millions of existing mortgages tied to insurance requirements. this country could hardly even handle the exodus of just the population of new orleans while florida is about to become the third largest state.

anyone gotta spare room?

 

[HFWR]

I hear Wyoming and the Dakotas are fairly empty/roomy...

 

[lazygood4nothinbum]

I hear Wyoming and the Dakotas are fairly empty/roomy...

funny. i'd self-insure first.

 

[justin]

i can't even imagine what would happen if insurance got to where no one can afford it. what of all the millions of existing mortgages tied to insurance requirements. this country could hardly even handle the exodus of just the population of new orleans while florida is about to become the third largest state.

So in other words, you're saying Florida real estate is nearly worthless, or at the least, it's severely overpriced? I've been saying that all along!

Seriously if there was a mass exodus, there would probably be investors that would swoop in to snap up real estate once goes down 50-90% in price. They would then self-insure (ie - pay cash and have no mortgage).

Interesting question re: mortgage and lack of insurance. My slightly educated guess is that the typical mortgage contract has a clause allowing FL mortgage companies/banks to purchase insurance on their own to cover their collateral, then charge the debtor for the insurance. If the debtor couldn't figure out a way to get insurance, banks probably would eventually. I don't know what happens if/when the FL real estate market drops by 40% in value and half the mortgages are under water (no pun intended).

 

[MasterBlaster]

When I opened this thread I thought it was going to be a diatribe about how taxpayers should subsidize Florida hurricane and flood insurance.

Now wouldn't that be fair !

Out where I live (SoCal) we all pay higher fire insurance rates so that people that live in very hazardous fire zones don't have to pay too much.

Every few years a big fire races through one or more of these high-risk zones and burns out all of the houses. These houses then get rebuilt at our expense. Some of the houses have been burned down and rebuilt several times.

Isn't that fair !

I say if you are stupid enough to build in a flood zone, hurricane zone, high risk fire zone then you should pay ALL of the cost to insure your house. It is sad that your house is now gone, but you wanted to live there. It is your problem not mine and I shouldn't have to subsidize it.

 

[brewer12345]

Any time the gummint has tried legislating insurance rates, consumers have genrally been sorry. I hope FL doesn't try that failed strategy.

 

[lazygood4nothinbum]

I say if you are stupid enough to build in a flood zone, hurricane zone, high risk fire zone then you should pay ALL of the cost to insure your house. It is sad that your house is now gone, but you wanted to live there. It is your problem not mine and I shouldn't have to subsidize it.

that's all very well & good; however, part of the problem here (not that a crystal ball would have made a bit of difference) is that most of the development in florida occured during a 30-year slow hurricane season. and even during the previous strong season, we didn't get five cat 5's passing overhead each year.

it's not as if we saw destruction the likes of san franscisco and then decided to rebuild like them over the same fault line. so when you can point to global warming for all your problems, like we can, i'll better accept your argument that liability shouldn't be spread thin. (besides, we here in south florida have been subsidizing tampa's premiums for years--hi doc.)

 

[Rich_by_the_Bay]

besides, we here in south florida have been subsidizing tampa's premiums for years--hi doc.)

The only thing you have been subsidizing for Tampa Bay is our hockey team. .

I reckon I'm paying an extra grand a year for insurance. Then again, no state income tax, a 3% cap on annual property tax increases and a glorious lifestyle (when it's not hurricaning), Nature Coast, manatees... hmm.. guess I'll take it.

No way half of Florida can flee north -- they'd never find anyone to buy their houses .

Joking aside, hurricanes suck but, man, there are a lot of offsetting factors here. Like many places.

I always laugh when southern Californians criticize any other region. Been there. Nuf said. Life is good here; alas, more have died in flooding in the mid-Atlantic and NE than did in hurricanes here in the past few years; Arizona is burning, NM is dying of thirst, California is mudsliding or waiting for the "big one," the upper midwest is dodging tornados or blizzards. Wait long enough, your turn will come.

Insurance by definition is about spreading the risk. To those who resent having to pay for "Florida's" or any other region's "stupidity" in favor of eat-what-you-kill, careful what you wish for: your turn will come. One-for-all and all-for-one works for me.

 

[MasterBlaster]

Rich_in_Tampa:

Did that feel good getting your digs in on California ?

Just so you know, For those of us that have earthquake insurance. The premiums are very high and the coverage is very poor.

And nobody is subsidizing our premiums.

You seem to have all of the answers...Who can I spread my risk to ?

 

[cute fuzzy bunny]

The only thing you have been subsidizing for Tampa Bay is our hockey team.

You guys have a hockey team?

Next you'll be telling me you have a football team too... :

 

[Rich_by_the_Bay]

Whoa -- easy big guy. It just seemed like it was a case of "people who live in glass houses." Here's why:

I say if you are stupid enough to build in a flood zone, hurricane zone, high risk fire zone then you should pay ALL of the cost to insure your house. 

So someone else is "stupid enough" to build in a hazard zone but...

For those of us that have earthquake insurance. The premiums are very high and the coverage is very poor.

you are "smart enough" to live in an earthquake zone (or brush fire, or mudslide, etc.) .

YOU pay earthquake insurance, WE pay hurricane and flood insurance, THEY pay higher fire insurance. We all make choices based on risk tolerance, lifestyle, career and family circumstances.

Maybe some insurance type can answer this, but my sense is that while stakeholders do indeed pay extra for their own known special risks, this assessment probably only covers part of the risk, with the rest assumed by general premiums and reinsurance.

 

[lazygood4nothinbum]

Seriously if there was a mass exodus, there would probably be investors that would swoop in to snap up real estate once goes down 50-90% in price... I don't know what happens if/when the FL real estate market drops by 40% in value and half the mortgages are under water (no pun intended). 

justin goes bargain shopping in south florida. hey, here's one, just n.e. of fort lauderdale, just off i-95, in fact, so close you'll hear the traffic in your living room. and only $319,900. but i gotta warn ya, even at 50% off, the bargain part's debatable.

http://tinyurl.com/qvbra here ya go, swoop on this.

 

[lets-retire]

When I opened this thread I thought it was going to be a diatribe about how taxpayers should subsidize Florida hurricane and flood insurance.

Now wouldn't that be fair !

Out where I live (SoCal) we all pay higher fire insurance rates so that people that live in very hazardous fire zones don't have to pay too much.

Every few years a big fire races through one or more of these high-risk zones and burns out all of the houses. These houses then get rebuilt at our expense. Some of the houses have been burned down and rebuilt several times.

Isn't that fair !

I say if you are stupid enough to build in a flood zone, hurricane zone, high risk fire zone then you should pay ALL of the cost to insure your house. It is sad that your house is now gone, but you wanted to live there. It is your problem not mine and I shouldn't have to subsidize it.

The whole state is a hurricane zone, so who do we spread the risk to? We also have the strictest building codes in the nation to help limit the hurricane damage. Unfortunately the state has had to rule in favor of the insurance companies because of all of the hurricanes. If they don't, the companies would leave. They threatened to after Andrew and every year after we are hit with a major they do the same thing.

I think this is on of the best places to live. The state is so large we have several football teams, a couple baseball teams, plus spring training for several northern teams, at least one hockey team, no state income tax, we are "subsidized" by the world with the Mouse and all of his competitiors in Orlando. We have a diverse political and ethnic climate. The hurricanes tear down old buildings that then have to be replaced by modern, better build building, so the state is self modernizing.

 

[Nords]

The whole state is a hurricane zone, so who do we spread the risk to?  We also have the strictest building codes in the nation to help limit the hurricane damage.  Unfortunately the state has had to rule in favor of the insurance companies because of all of the hurricanes.
The hurricanes tear down old buildings that then have to be replaced by modern, better build building, so the state is self modernizing.

Have you ever checked out the architecture of the Pacific's hurricane/earthquake capital, Guam?

Modern concrete blockhouse. But then they don't have to worry about sinkholes, either.

 

[cute fuzzy bunny]

The state is so large we have several football teams

I'm not buying it. Name one!

 

[lets-retire]

I'm not buying it.  Name one!

There's one at my local high school.







You thought I ment professional teams. Now that's funny.


Nords--Yup been there. That was the first time I saw houses built of blocks. Man that island was small.

 

[REWahoo]

lg4nBum, looks like the word is out. CNN. com says the sun may be setting on the Sunshine State.

Rethinking Florida: Hurricane-related costs are detracting from the allure of the Sunshine State

 

[lazygood4nothinbum]

yeah yeah yeah, we're all putting for sale signs up and packing our bags.

actually i am seeing some more signs up. the guy across the street from me just tore off his garage and is adding some bedrooms and bathrooms. he expects to sell upon completion for about a mil. the house on the corner just went up for sale for $650k. the owner's are citing insurance costs. they sold their key west house and bought this one a few years ago so i think they are just cashing out again and blaming costs.

the neighbor next to him is also now blaming insurance costs and says if he gets this job in las vegas that he'll put his house up for sale and wants 1/2 mil. though i recall he's been trying to move to las vegas for about 3 or 4 years now, before insurance cost was an issue.

two other lots on my block are for sale, a teardown and an empty lot, both owned by the church on the next street and neither of which has been offered for sale likely in 30 years.

so all the signs don't look good, but sometimes you have to read the fine print. a few blocks to the south of me there are six 1 million dollar houses going up, all have realtor signs on them but four recently added "sold" to the sign. the same developer is putting in another 5 or 6 houses just a few blocks north of me.

no doubt those who did funky financing are gonna be in trouble. but it's not like every house in south florida changed hands over the last 5 years. most of my neighbors are all the same people who have been here for 10 years or more.

florida really does need to address insurance here though. speaking as a socialist, i say we tell all the insurance companies to get the hell out of florida and lets just self-insure through premiums & taxes. if we get a disaster, the public company might go into the red and then after a few months of collecting more premiums it'll be right back in the black again. we should self-insure for auto insurance too. why give that money away?

and while we're at it. i think this year we'll have the bermuda high set itself up so that all the hurricanes hit the carolinas this year instead of florida. then lets see who's talking.

 

[Rich_by_the_Bay]

Around here the beachfront is getting hit heavily with increased insurance bumps, and their market values are dropping considerably.

Interestingly, in the "real" neighborhoods (meaning where nontourists, retired long-time Floridians, and working folks live), housing prices are only sagging a bit, while premiums are up but usually not by show-stopper amounts.

My DW the realtor actually prefers a market where prices are sane, and neither seller nor buyer are at too much of an advantage. She says people then tend to bargain in good faith, fewer lawsuits from angry buyers, and prices tend to be more proportional to the true value of the property.

For all that, there are condos going up like weeds everywhere from downtown to the shore.

 

[justin]

and while we're at it. i think this year we'll have the bermuda high set itself up so that all the hurricanes hit the carolinas this year instead of florida. then lets see who's talking.

Why you want to send trouble my way?

 

[lazygood4nothinbum]

Why you want to send trouble my way?   

well of course not, i'm just wishing them away from here and, well, i guess they're gonna go somewhere. though i have been considering a summer mountain home and i wouldn't mind doing some bargain shopping.