Florida living

[brett]

Entering the Florida market and insuring homes is one thing. Even if it is an A+ or A- rated firm.

The rubber hits the road after a few years of financial results from that market. Premium income vs claims paid. The entrant makes a decision to remain in the market or to pull out.

There are a number of very well established insurers who have apparently pulled out of this market.

These are/were serious players with a great deal of underwriting experience in many different markets. They did not pull out of the state because they were profitable or viewed the insurance risk as acceptable given their corporate goals.

That is a problem, and will continue to be a challenge for home owners in certain Florida zip codes and perhaps in the entire state. I have no idea what the solution will be other that higher premiums that people may or may not be able to afford.

 

[pb4uski]

To be clear though, while hurricane claims are an issue in Florida's home insurance problem, the much bigger issue in Florida was fraud.

https://news.fiu.edu/2022/the-big-r...nt-just-hurricane-risk-its-fraud-and-lawsuits

... But the biggest single reason is the “assignment of benefits” problem, involving contractors after a storm. It’s partly fraud and partly taking advantage of loose regulation and court decisions that have affected insurance companies.

It generally looks like this: Contractors will knock on doors and say they can get the homeowner a new roof. The cost of a new roof is maybe $20,000-$30,000. So, the contractor inspects the roof. Often, there isn’t really that much damage. The contractor promises to take care of everything if the homeowner assigns over their insurance benefit. The contractors can then claim whatever they want from the insurance company without needing the homeowner’s consent.

If the insurance company determines the damage wasn’t actually covered, the contractor sues.

So insurance companies are stuck either fighting the lawsuit or settling. Either way, it’s costly. ...

According to the Insurance Information Institute (III), 71% of the $51 billion paid out by Florida insurers over a 10-year period went to attorneys' fees and public adjusters. This means that litigation expenses accounted for about $36.1 billion of the cost of homeowner insurance claims in Florida. ...

 

[Aerides]

To be clear though, while hurricane claims are an issue in Florid's home insurance problem, the much bigger issue in Florida was fraud.

https://news.fiu.edu/2022/the-big-r...nt-just-hurricane-risk-its-fraud-and-lawsuits

They knocked on my door several times, and I was never polite. We've had nothing that loosened a shingle in my neighborhood since 2006.

And over the last 5 years, I can look out my window and point to at least 4 homes that got roofs replaced via these companies. I really can't blame the homeowners - they are convincing, and most people don't easily to turn down a "free" roof. The biggest company here legitimized themselves via sponsoring college bowl games and still have their name on a big one...

 

[Scuba]

Hey Scuba

I have been following this entire thread. It has been an interesting and informative thread. Thank you for sharing and best wishes with your new home!

Thank you so much!

 

[Scuba]

To be clear though, while hurricane claims are an issue in Florida's home insurance problem, the much bigger issue in Florida was fraud.

https://news.fiu.edu/2022/the-big-r...nt-just-hurricane-risk-its-fraud-and-lawsuits

What a scam! Sad that it is forcing many long-term residents out who can no longer afford insurance.

 

[Scuba]

Entering the Florida market and insuring homes is one thing. Even if it is an A+ or A- rated firm.

The rubber hits the road after a few years of financial results from that market. Premium income vs claims paid. The entrant makes a decision to remain in the market or to pull out.

There are a number of very well established insurers who have apparently pulled out of this market.

These are/were serious players with a great deal of underwriting experience in many different markets. They did not pull out of the state because they were profitable or viewed the insurance risk as acceptable given their corporate goals.

That is a problem, and will continue to be a challenge for home owners in certain Florida zip codes and perhaps in the entire state. I have no idea what the solution will be other that higher premiums that people may or may not be able to afford.

This is probably the scariest thing for us moving to Florida, and a key reason why we chose a home completely outside of hurricane evacuation zones and flood zones. We considered buying much closer to the beach and decided the risk of not only hurricane damage but also crazy insurance prices was just not worth it.

 

[Koolau]

What a scam! Sad that it is forcing many long-term residents out who can no longer afford insurance.

It's so typical. Bad behavior is paid for by all of us. I can think of other current examples, but I'll just let that go for now.

 

[JoeWras]

I've posted before on insurance roofs about all my neighbors getting "free" roofs. It isn't as bad as FL because I think the litigation rules are different. Still, it is part of the calculus causing problems. We haven't had a lot of companies moving out, but it may be only a matter of time.

Two years ago, when one of these knock-on-door types came through, he told me I could get a free roof through insurance. I asked him about the process, and my $1500 deductible. He told me about the assignment process, which included a conference call where I would be coached. Later, if I put up a sign in my yard for 60 days, I'd get an "advertising" kickback from him.

How does anything think this is not fraudulent?

 

[bigcmagor]

Our Florida neighbors had a worn out 20+ year old roof. They didn't have the money to replace it, so they decided to turn in a storm damage claim related to hurricane Irma, three years hence. The claim was denied, so they hired an attorney, sued and prevailed. They promptly packed their car and took off on a two week vacation, ending in Disney World in a $500/night room. Needless to say, the roof was not replaced and hurricane Ian blew it off and in our direction, unfortunately. We couldn't believe when the same insurer was forced to pay for the new roof again, as well as water damage to the interior of the home. This is one of the insurers that is now bankrupt, unsurprisingly.

 

[Aerides]

. Needless to say, the roof was not replaced and hurricane Ian blew it off and in our direction, unfortunately. We couldn't believe when the same insurer was forced to pay for the new roof again, as well as water damage to the interior of the home. This is one of the insurers that is now bankrupt, unsurprisingly.

In Florida in most cases, your insurance payment is a reimbursement to the provider. No roof no payment. It wasn't always that way, but has been for several years now.

 

[bigcmagor]

In Florida in most cases, your insurance payment is a reimbursement to the provider. No roof no payment. It wasn't always that way, but has been for several years now.

Since Mr. Neighbor works in construction, I believe they produced paperwork necessary to get their hands on the proceeds. I shared the story as an example of why insurers are running away from the state. Hopefully, recent legislation will improve availability over time.

 

[Koolau]

I've posted before on insurance roofs about all my neighbors getting "free" roofs. It isn't as bad as FL because I think the litigation rules are different. Still, it is part of the calculus causing problems. We haven't had a lot of companies moving out, but it may be only a matter of time.

Two years ago, when one of these knock-on-door types came through, he told me I could get a free roof through insurance. I asked him about the process, and my $1500 deductible. He told me about the assignment process, which included a conference call where I would be coached. Later, if I put up a sign in my yard for 60 days, I'd get an "advertising" kickback from him.

How does anything think this is not fraudulent?

This seems so blatant, why can't gummint(s) go after such fraud? I would certainly be tempted to help them (gummint) get the bad guys.

 

[pb4uski]

This is probably the scariest thing for us moving to Florida, and a key reason why we chose a home completely outside of hurricane evacuation zones and flood zones. We considered buying much closer to the beach and decided the risk of not only hurricane damage but also crazy insurance prices was just not worth it.

I'm afraid that you're going to find the crazy insurance prices are everywhere, not just near the coast. [emoji17]

 

[brett]

Although we do not live in Florida I fully expect our home insurance to increase because of inflation and because of climate change. That is a hard reality. The cost of building products and construction labor is up, up, up. Climate change will only increase insurance claims.

We replaced our 16 year old roof last year. It was time. We live in the snow belt. Snow and ice in the winter, hot temps in the summer.

Interestingly enough, when I called to renew the first question the insurer's agent ask was if we had replaced our roof recently. We had, and we were given a premium discount for doing so. We had the exact same question 15 years ago when we lived in a large home that had a huge cedar shake roof. The question at that time was not has it been replaced but when did you last have it inspected and complete any necessary repairs.

We have heard of a few others whose insurer has advised them to replace their aging roof or start looking for a new insurer. Sounds reasonable to me. My view is that I have a duty to reasonably mitigate any potential damage by performing normal upkeep/maintenance activities.

 

[MichaelB]

The bigger issue in Florida homeowners insurance is not fraud, but it does exist and there’s no doubt fraud has been used to garner support for the recent legislative changes.

Many Florida homes built in the 80’s and 90’s are falling apart due to a combination of lax building standards and a climate that is harsh on structures. Roofs and plumbing are falling into disrepair and failing and are very expensive to repair. It’s difficult to show a 30 year old roof in poor shape and rotting was not caused or exacerbated by hurricane, so insurers find themselves liable for entire roof replacements when age and poor building are main culprits. This is not fraud.

This has begun to change in recent years as insurers inspect more carefully before extending policies and require roofs meet the ‘02 code standards as a pre-requisite to insure. Policy premiums have also risen sharply. These 2 factors are helping ameliorate the insurance challenge and will probably do as much or more than any of the legislative initiatives.

 

[ShokWaveRider]

This has begun to change in recent years as insurers inspect more carefully before extending policies and require roofs meet the ‘02 code standards as a pre-requisite to insure. Policy premiums have also risen sharply. These 2 factors are helping ameliorate the insurance challenge and will probably do as much or more than any of the legislative initiatives.

We lucked out as the main changes were made for the '02 builds and our home was completed in 2002. It was more luck than judgement though. We did not know that when we moved here, the realtor we used conveniently omitted to tell us that as they were showing us pre-2000 home. I think that is terrible, as a result I do not trust any realtors and rate them right up there with car sales people.

I cannot keep count of amount of pre-2000 home here that have had copper plumbing leaks and re-pipes to CPVC in our small 600 home development. Even now they are still building with stick frames. I would not buy a home that is not concrete block or better in Florida.

 

[Scuba]

I'm afraid that you're going to find the crazy insurance prices are everywhere, not just near the coast. [emoji17]

Actually the quote for our Lakewood Ranch home is not too bad. Around $2600 for a 2,500 sq ft SFR with a pool/spa and pool cage.

 

[Scuba]

We lucked out as the main changes were made for the '02 builds and our home was completed in 2002. It was more luck than judgement though. We did not know that when we moved here, the realtor we used conveniently omitted to tell us that as they were showing us pre-2000 home. I think that is terrible, as a result I do not trust any realtors and rate them right up there with car sales people.

I cannot keep count of amount of pre-2000 home here that have had copper plumbing leaks and re-pipes to CPVC in our small 600 home development. Even now they are still building with stick frames. I would not buy a home that is not concrete block or better in Florida.

One thing I noticed in SW FL is that almost all single story homes are now being built with concrete block, but the builders seem to be using only wood frame for the second story on two-story homes. This doesn’t make sense to me as the second story would seem to be more vulnerable to wind damage.

 

[ShokWaveRider]

One thing I noticed in SW FL is that almost all single story homes are now being built with concrete block, but the builders seem to be using only wood frame for the second story on two-story homes. This doesn’t make sense to me as the second story would seem to be more vulnerable to wind damage.

Never understood this either, our FROG is wood frame too, but our main is Concrete Block. I have the step-by-step building photos of our home from the ground up and the FROG is well tied down per 2002 Codes, you can see the ties in the photos of the FROG. The house plans, which I also have clearly show the ties also. We have ~2,800 swft on the main floor with ~450 sqft over the garage.

 

[Cayman]

I was talking to my wife and just doing a thought experiment on how one might build something in Florida that didn't need flood or hurricane insurance. Thoughts were toward some sort of reinforced concrete structure but the roof was tricky. Maybe a concrete dome home

For wind / hurricane concerns - take a look at Deltec. Many of their "round" homes have very good (often amazing) results post hurricane. Withstanding a Cat 4 and even Cat 5 hurricane with no structural damage. Post hurricane no homes standing except a Deltec. Deltecs have roofs that are key to their high hurricane survival rate. Construction costs are relatively reasonable compared to traditionally constructed homes. Aesthetically you may find them lacking a bit (think silo) but when you own property on the beach or near the coast you may gladly trade looks for safety and lower insurance premiums. You can elevate the home but will still have flooding and storm surges to deal with - water is still an issue in my opinion. But you may keep your roof on and that's a huge plus.

 

[Rianne]

I'm afraid that you're going to find the crazy insurance prices are everywhere, not just near the coast. [emoji17]

Beyond insurance prices, the hassle keeps me from ever considering moving to FL. Beyond flooding is the mold left behind in the humidity. Where to stay when rebuilding. And not just my property, but the devastation to the community as well. Everything changes. The loss is not worth it, IMO. So it happens, when will it happen again? A year, month, two years? Far too unpredictable for my taste.

 

[ShokWaveRider]

Florida Tax Portability comparison - As I understand it, which is not much.

Scuba: Based on the average home price for your new area for a 2,483 sqft home, the new Taxable value will be about $1m. maybe a little less, your estimated property taxes will be about $9,500 a year.

If we sold our $1.25m home in Florida and purchased a $1m someplace else in Florida, our RE Tax will approximately double from $5k to ~ $8-10k at least that is how I understand it, which is not well at all. This is WITH the Florida Tax portability exemption and the homestead exemption.

I tried a few portability calculators, and they all give me a different number.


I just broke down and called the tax office. I understand how it works now. Our taxes would go from $5k to $7,800 if we moved from our home to a $1m. I sort of get now. Not worth selling and moving really.

 

[Badger]

Never understood this either, our FROG is wood frame too, but our main is Concrete Block. I have the step-by-step building photos of our home from the ground up and the FROG is well tied down per 2002 Codes, you can see the ties in the photos of the FROG. The house plans, which I also have clearly show the ties also. We have ~2,800 swft on the main floor with ~450 sqft over the garage.

I only have 1 floor and it is concrete block built in 1955. It is also 2 short blocks to the ocean so it has seen a few hurricanes and nor' easterns in the past (almost) 70 years. All the other houses (McMansions) in the neighborhood have been "stick built" in the past 10-12 years. I'm betting on my house.
If I was to build a house it would be concrete block with horizontal and vertical rebar and poured concrete in the cavities. Probably a standing seam metal roof and a 4 foot crawl space.

Cheers!

 

[MichaelB]

I only have 1 floor and it is concrete block built in 1955. It is also 2 short blocks to the ocean so it has seen a few hurricanes and nor' easterns in the past (almost) 70 years. All the other houses (McMansions) in the neighborhood have been "stick built" in the past 10-12 years. I'm betting on my house.
If I was to build a house it would be concrete block with horizontal and vertical rebar and poured concrete in the cavities. Probably a standing seam metal roof and a 4 foot crawl space.

Cheers!

I can’t imagine a wood frame house anywhere close to the Florida coast. If the heavy winds don’t knock it down the humidity will lead to decay and it would be very expensive to keep cool in the summer.

 

[Scuba]

Scuba: Based on the average home price for your new area for a 2,483 sqft home, the new Taxable value will be about $1m. maybe a little less, your estimated property taxes will be about $9,500 a year.

If we sold our $1.25m home in Florida and purchased a $1m someplace else in Florida, our RE Tax will approximately double from $5k to ~ $8-10k at least that is how I understand it, which is not well at all. This is WITH the Florida Tax portability exemption and the homestead exemption.

I tried a few portability calculators, and they all give me a different number.


I just broke down and called the tax office. I understand how it works now. Our taxes would go from $5k to $7,800 if we moved from our home to a $1m. I sort of get now. Not worth selling and moving really.

Our realtor advised us that our property tax rate will be between 1.2-1.3%, plus our development has CDD which is around $2,500. I’m expecting property taxes including CDD to be in the range of $15-$16K with the homestead exemption.