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Thread: Florida, insurance and the rest of us.

  1. #1
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    Default Florida, insurance and the rest of us.

    The insurance industry is about to begin paying out billions in losses from hurricane Ian and I cannot believe that some of those losses will be spread out by increasing premiums on those of us who live in safer areas of the country.
    Now, I lived in Florida for 20 years so I empathize with what those folks are going through but during the time I owned property there I was always surprised at the cheap cost of insuring my home and boats.
    It seems to me that we cannot continue to subsidize people living in high-hazard zones either through private insurance or the cost of federal money spent on rebuilding.
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    Default Re: Florida, insurance and the rest of us.

    The coast is a nice place to visit, and with traffic it’s not even really a nice place to visit anymore. We are incapable of learning the lessons nature is trying to teach us. Now it’s time to sit back and watch in wonder the power of weather. I think there’ll be plenty of programming to watch.
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  3. #3
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    Default Re: Florida, insurance and the rest of us.

    If it makes you feel any better, our flood insurance goes up about 12% per year. Our Homeowners has doubled twice over the last 5 years. Our insurance company has set a value for our home that is 1.5x what it would take to build a new house for, yet they require that we insure at 100% of thier valuation. We have shopped insurance, we have changed insurance companies. Those that are still insuring in our area are expensive. I am 5 miles north of the Gulf of Mexico.
    Lets see; my job is here, my family is here, my house is paid for. If our house were totaled, we would take the money and walk away. But until then, should I just abandon what I have worked for so you will feel better about yourself?

    Jack
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  4. #4
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    Default Re: Florida, insurance and the rest of us.

    While we had my dad’s house on the coast, we paid homeowners, windstorm, and flood separately. It was not cheap.

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    Default Re: Florida, insurance and the rest of us.

    I don't know if this will matter, but DeSantis, as a congressman, voted AGAINST federal help for NY and NJ behind Sandy.

    As to insurance, I've seen reports of places where people can no longer get insurance, period.

    This is one reason why we need the wealthy to pay their fair share of taxes, so the feds can afford to help in these situations.

    I remember going to two conventions for Postal Employees many years ago. Those in states more expensive to live in tried to get an area wage, which was knocked down by those in the southern states. They literally said to their brothers from the expensive states, "We didn't tell you to live where the cost of living is higher."

    Next convention, those people were suffering from a hurricane and wanted help. The response they got was, "We didn't tell you to live in hurricane areas."

    Said something about human nature.
    "Banning books and not guns seems backwards. Can't think of anyone ever shot by a book

  6. #6
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    Default Re: Florida, insurance and the rest of us.

    Quote Originally Posted by John Smith View Post
    I don't know if this will matter, but DeSantis, as a congressman, voted AGAINST federal help for NY and NJ behind Sandy.
    Why do I think he will complain that Biden is not doing enough?
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  7. #7
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    Default Re: Florida, insurance and the rest of us.

    For properties that are what one might consider Genuinely coastal (beachfront, maybe a block or two inland), the insurance companies collect plenty to offset the payouts. I don't want the government subsidizing any of that, but I don't for a moment imagine that's going to change without wholesale campaign finance reform.

    The issue really is that a storm like this causes a lot of costly damage far beyond that immedate beachfront on properties which haven't been paying that coastal premium. Does the insurance industry factor a certain "florida risk" into their math to cover the frequency of hurricanes? It would be baffling to find that they do not.

    With respect to the notion that "we'll all pay more because of florida"... meh.
    We're all paying more for more extreme weather across the board, aren't we? More hurricane damage, more blizzard damage, pipes freezing in texas, wildfires in the west, tornadoes in places that generally haven't had tornadoes.

    I had a stick in my craw after Katrina because it seemed crazy for the government to subsidize the reconstruction of "vital infrastructure" in the same high-risk locations... if that infrastructure is so damn vital, rebuild it someplace safer!
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    Default Re: Florida, insurance and the rest of us.

    Quote Originally Posted by michigangeorge View Post
    It seems to me that we cannot continue to subsidize people living in high-hazard zones either through private insurance or the cost of federal money spent on rebuilding.
    Thoughts?
    You (we) are not subsidizing anyone. You (we) make a decision as to the value of insurance cost relative to insurance benefits. If the cost outweighs the benefits, go without insurance.

    Our homeowner's insurance cost is low enough that we are willing to pay for it.
    Life is complex.

  9. #9
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    Default Re: Florida, insurance and the rest of us.

    After previous storms and some questionable litigation, a number of insurance companies have stopped doing business in Florida.

    There do, however, appear to be concerns about whether or not some of the companies that are doing business in Florida can cover the losses.

    https://www.yahoo.com/gma/hurricane-...164500343.html
    "The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails."
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  10. #10
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    Default Re: Florida, insurance and the rest of us.

    the insurance industry is not monolithic, right? insurance companies still need to compete with each other. so one company can win the competition for low risk homeowners insurance simply by avoiding the high risk market.

    in my years buying construction contractor liability insurance, that process played out several times, when underwriters simply dropped out of the particular market segment due to high and unpredictable losses. they didn't even bother to raise rates, they simply dropped out. and a new underwriter appeared, not necessarily more expensive, just willing to risk it. for a while.

    i imagine that insurance companies view homeowners insurance in some parts of the country as a loss leader for bundling with auto and life and whatever else. for that reason alone they don't abandon the market. but i don't believe they can afford to pass the cost off on homeowners in other regions, because they would simply price themselves out of those areas.

  11. #11
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    Default Re: Florida, insurance and the rest of us.

    Quote Originally Posted by michigangeorge View Post
    The insurance industry is about to begin paying out billions in losses from hurricane Ian and I cannot believe that some of those losses will be spread out by increasing premiums on those of us who live in safer areas of the country.
    Now, I lived in Florida for 20 years so I empathize with what those folks are going through but during the time I owned property there I was always surprised at the cheap cost of insuring my home and boats.
    It seems to me that we cannot continue to subsidize people living in high-hazard zones either through private insurance or the cost of federal money spent on rebuilding.
    Thoughts?
    You aren't subsidizing anything. Home and boat insurance is considerably higher in Florida due to the increased hurricane risk and the number of properties that are not built with the latest wind mitigation features.

  12. #12
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    Default Re: Florida, insurance and the rest of us.

    Do they offer insurance for "Acts of God" now?

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    Default Re: Florida, insurance and the rest of us.

    Quote Originally Posted by JTA View Post
    If it makes you feel any better, our flood insurance goes up about 12% per year. Our Homeowners has doubled twice over the last 5 years. Our insurance company has set a value for our home that is 1.5x what it would take to build a new house for, yet they require that we insure at 100% of thier valuation. We have shopped insurance, we have changed insurance companies. Those that are still insuring in our area are expensive. I am 5 miles north of the Gulf of Mexico.
    Lets see; my job is here, my family is here, my house is paid for. If our house were totaled, we would take the money and walk away. But until then, should I just abandon what I have worked for so you will feel better about yourself?

    Jack
    What would make me feel better... just noodling here ---

    1. All coastal states to use their powers of Eminent Domain and suchlike to reclaim their coasts for the use of all people. Kinda like Oregon did long time ago... just harder now because it wasn't done when it should have been.

    2. Make those lands part of the Hwy and/or Parks dept.

    3. Create state parks every few miles.

    https://en.wikipedia.org/wiki/Oregon...%20tide%20mark.

    4. On any developable lands inshore of the coastal Parks Strip... require not only high replacement value home insurance, but ALSO require that a bond be paid for that amount in case private insurance companies fail and therefore cannot meet their obligations. And enforce the existing Building Codes. Seems like the construction folks have the details worked out, if the Building & Zoning department would consistent enforce codes. Of course, beef them up if necessary. OR allow houses to skip the building codes if they were built to a 'sacrificial' standard. Meant to be blown down, buried in the sand, washed out to sea. 100% biodegradable. No styrofoam, glass, plastic laminate, plastic housewrap, etc. Essentially - just wood and nails, with a very few exceptions (sinks/waterpipes, maybe?).

    5. OR skip the bond, and make bankruptcy illegal for such firms. Such strictures exist in other arenas - like student loans not being dischargeable by bankruptcy. I'm sure the barristers & policy wonks can work out the details.

    6. OR do the Eminent Domain thing over time. Every time a house is totaled, it falls to ED. The insurance/bond money goes to the owner, and title to the state. When any previously defined zone/neighborhood/area reaches 50% ED, it all goes to ED, and over to the Parks Dept.

    7. Then... Let Nature take its course. No dredging, filling, riprap, and suchlike. I'd go so far as to allow planting native vegetation to encourage dune stabilization, or buffer structures from wind, but no further.
    David G
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    Default Re: Florida, insurance and the rest of us.

    I've been thinking about how it is absolutely necessary for the federal government to help states rebuild; not necessarily private homes, but roads, bridges, etc.

    Then I realize Reagan gave the wealthy a tax cut. Debt grew. G.W. gave them two tax cuts and went to war in two countries. Trump gave them another cut.

    WHERE THE HELL IS THE FEDERAL GOVERNMENT SUPPOSED TO GET THE MONEY TO HELP STATES DESTROYED BY STORMS?
    "Banning books and not guns seems backwards. Can't think of anyone ever shot by a book

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    Quote Originally Posted by Canoeyawl View Post
    Do they offer insurance for "Acts of God" now?

    If you live in an official flood zone, FEMA runs the National Flood Insurance Program (NFIP). Your tax dollars at work.

    https://www.fema.gov/flood-insurance

    If you live in an official flood zone, and have a federally-backed mortgage, you're required to carry flood insurance. But if you're free of the mortgage, you're not required to carry it. A lot of people [wrongly] assume that their homeowners' policy will cover things, so, IIRC, Florida's has about 45% of homeowners carrying flood insurance (a higher rate than the national average).

    But, apparently the flood plain maps are somewhat out-of-date and haven't taken into account climate change and how that affects things like hurricanes and other extreme weather events.

    https://www.politico.com/news/2022/0...rance-00059598
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  16. #16
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    Default Re: Florida, insurance and the rest of us.

    Here several towns have been flooded 4 times in nearly 2 years, and fire effects some communities the same way. Those flooded are likely no longer vable and should move with a land swap etc, If available. But not everyone wants to move, and for some it would not be viable in financial terms. Then there's climate change, storm intensity and coastal flooding………….
    Insurance is a business, costs will rise for everyone and many will no longer be able to afford it making costs rise again……...

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    Default Re: Florida, insurance and the rest of us.

    I carry flood insurance. My rate 20, years ago, was maybe $500/ year. It's now about $3500 year.
    During my course of ownership, storm surge flooded me twice. ( Irene and then Sandy.). Both times, about 25K in damages paid for out of insurance. I was paid fairly and promptly. I am at least even, if not ahead.
    There are two kinds of boaters: those who have run aground, and those who lie about it.

  18. #18
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    Default Re: Florida, insurance and the rest of us.

    Some hard numbers about the state of insurance against this situation in Florida here:

    https://www.politico.com/news/2022/0...rance-00059598
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  19. #19
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    Default Re: Florida, insurance and the rest of us.

    I seem to remember some years back a news story that insurance companies were ceasing flood insurance in areas that were likely to flood.

    I know my friend's deli couldn't get flood insurance, as the agent said it's not a flood zone, as they're having this conversation over a basement full of flood water.
    "Banning books and not guns seems backwards. Can't think of anyone ever shot by a book

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    Default Re: Florida, insurance and the rest of us.

    Quote Originally Posted by John Smith View Post
    I seem to remember some years back a news story that insurance companies were ceasing flood insurance in areas that were likely to flood.

    I know my friend's deli couldn't get flood insurance, as the agent said it's not a flood zone, as they're having this conversation over a basement full of flood water.
    And yet a quick search found private insurers that specialize in flood insurance anywhere - i.e. not in the government mapped flood zones, willing to insure residences up to $4 million and contents up to $500K. They also insure businesses.

    But like most other insurance, people are reluctant to pay for whatever value it provides.
    Life is complex.

  21. #21
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    Default Re: Florida, insurance and the rest of us.

    Quote Originally Posted by Nicholas Carey View Post
    If you live in an official flood zone, FEMA runs the National Flood Insurance Program (NFIP). Your tax dollars at work.
    Just read someplace that only 1/3 of the properties hit by the recent flooding have this insurance.

    Here's a 2019 map of hurricane activity. Seems like some areas are going to be depopulated owing to recurring damage and the high cost of rebuilding to a storm-resistant standard.


  22. #22
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    Default Re: Florida, insurance and the rest of us.

    I recall reading (some years ago) that a homeowner in Texas was rebuilding his house , after water damage, for the 17th time ! ! Seems to me that after a certain number of incidents, I would locate elsewhere


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  23. #23
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    Default Re: Florida, insurance and the rest of us.

    Quote Originally Posted by skuthorp View Post
    Here several towns have been flooded 4 times in nearly 2 years, and fire effects some communities the same way. Those flooded are likely no longer vable and should move with a land swap etc, If available.
    Where I grew up in Humboldt County CA there were two really bad floods, in 1955 and again in 1964. The Eel River Valley was like an inland sea, miles across. I remember getting out of high school to load helicopters taking food to towns like Rio Dell, that were cut off. I also remember seeing houses floating down the river, and hundreds of dead cows after the waters receded.

    After the '64 flood people got the hint. The old townsite of Klamath was condemned and a new town built on higher ground. Some towns, like Pepperwood, were simply abandoned. I don't know for sure, but don't recall much federal or state help to those who lost property. In those days, people didn't automatically expect that the government would help them. They received help closer to home; family, friends, and local businesses. We took families into our home, as did many other townspeople. My father had a hardware store and basically opened his doors to flood victims, gave away half his inventory with no expectation of repayment.

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    Default Re: Florida, insurance and the rest of us.

    Quote Originally Posted by John Smith View Post
    I don't know if this will matter, but DeSantis, as a congressman, voted AGAINST federal help for NY and NJ behind Sandy.

    As to insurance, I've seen reports of places where people can no longer get insurance, period.

    This is one reason why we need the wealthy to pay their fair share of taxes, so the feds can afford to help in these situations.

    I remember going to two conventions for Postal Employees many years ago. Those in states more expensive to live in tried to get an area wage, which was knocked down by those in the southern states. They literally said to their brothers from the expensive states, "We didn't tell you to live where the cost of living is higher."

    Next convention, those people were suffering from a hurricane and wanted help. The response they got was, "We didn't tell you to live in hurricane areas."

    Said something about human nature.
    Having known a few postal employees. I can 100% believe that.
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  25. #25
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    Default Re: Florida, insurance and the rest of us.

    Quote Originally Posted by Boatbum View Post
    You aren't subsidizing anything. Home and boat insurance is considerably higher in Florida due to the increased hurricane risk and the number of properties that are not built with the latest wind mitigation features.
    But is the higher cost enough to maintain viable coverage so the insurance companies can actually pay out as needed? As I originally stated - during my 20 years there I was always surprised at the low cost of both home and boat insurance and because the insurance was so cheap I was always over-insured.
    We are about to find out how the insurance companies handle these losses.
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  26. #26
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    Default Re: Florida, insurance and the rest of us.

    Unfortunately insurance is global. The brokers and agencies might be local, but the underwriters are quite likely not.

    Which means my insurance rate in Canada goes up.

  27. #27
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    Default Re: Florida, insurance and the rest of us.

    Quote Originally Posted by Art Haberland View Post
    Having known a few postal employees. I can 100% believe that.
    I think there was a valid argument for area wages, as postal employees were paid the same regardless of where they lived/worked, and some places are more expensive.

    Turned out to be a if you don't wash my hand I won't wash yours, which I thought was backwards. But, sadly human.
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  28. #28
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    Default Re: Florida, insurance and the rest of us.

    Superstorm Sandy hit the NJ coast line in 2012. The eye came ashore just a few miles from my house across the barrier island in the town of Mantoloking. The barrier island is in the foreground, mainland across the bridge in background. This is the day after Sandy hit. Most of the houses were destroyed. Sandy cut a new inlet through the barrier island right at the base of the bridge. Major damage from wind and storm surge.
    flood.jpg


    People forget. Here's the same location today. This is a very wealthy town. The beach front homes go for $10M to $15M. They're still rebuilding 10 years later, and these people have a boatload of money.
    a.jpg

    What's a 100 year storm. Huh?!? We had one just 10 years ago. That means we won't have another one for 90 more years. We got nuthin to worry about.

  29. #29
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    Default Re: Florida, insurance and the rest of us.

    Quote Originally Posted by RichW View Post
    Superstorm Sandy hit the NJ coast line in 2012. The eye came ashore just a few miles from my house across the barrier island in the town of Mantoloking. The barrier island is in the foreground, mainland across the bridge in background. This is the day after Sandy hit. Most of the houses were destroyed. Sandy cut a new inlet through the barrier island right at the base of the bridge. Major damage from wind and storm surge.
    flood.jpg


    People forget. Here's the same location today. This is a very wealthy town. The beach front homes go for $10M to $15M. They're still rebuilding 10 years later, and these people have a boatload of money.
    a.jpg

    What's a 100 year storm. Huh?!? We had one just 10 years ago. That means we won't have another one for 90 more years. We got nuthin to worry about.
    I don't think 100 years is as long as it used to be.
    "Banning books and not guns seems backwards. Can't think of anyone ever shot by a book

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