Posted on 07/04/2023 2:08:08 PM PDT by Texas Fossil
As if carrying Homeowners insurance in California and Florida wasn’t already subject to ridiculous increases in premiums, things are about to get a lot worse.
Effective with the July 1st notification, Reinsurance rates, these are companies who insure the insurance companies, are telling their clients there will be up to a 50% increase in cost for underwriting catastrophic coverage. Perhaps claims in the past few years have been higher; however, I suspect the issue amid the reinsurers is partly connected to the issue that surrounds banks and bond rates.
Back when interest rates were near zero, banks and reinsurers likely scooped up lots of Treasuries and bonds. As the Federal Reserve hikes rates those bonds have declined in value. When interest rates rise, newly issued bonds start paying higher returns to investors, which makes the older bonds with lower rates less attractive/valuable. The result is that most banks, and I suspect big reinsurance houses, have some amount of unrealized losses on their books.
Whatever the reason, the big reinsurance companies are now telling the insurance carriers their catastrophe rates are going up as high as 50%. Those insurance companies will then pass those rate hikes to the individual policy holders for commercial buildings, residential homes, cars, RV’s etc. Bottom line, homeowner insurance rates are about to go up again with policy renewals, especially in Florida and California.
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LONDON, July 3 (Reuters) – U.S. property catastrophe reinsurance rates rose by as much as 50% at a key July 1 renewal date, broker Gallagher Re said in a report on Monday, with states such as California and Florida increasingly hit by wildfires and hurricanes.
Reinsurers insure insurance companies, and have been raising rates in recent years because of steepening losses, which industry players put down in part to the impact of climate change. Higher reinsurance rates can affect the premiums which insurers charge to their customers.
U.S. reinsurance rates for policies which previously faced claims for natural catastrophes rose 30-50%, Gallagher Re said.
Reinsurance rates for similar policies in Florida rose 30-40%, the broker added.
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Some insurance firms have pulled out because of the risk of heavy losses. State Farm said in May it would stop selling new insurance policies to homeowners in California.
In Florida, “all the major carriers (insurers) left and so you ended up with this market which is populated by a large number of very small, very thinly capitalised insurers which is exactly what you don’t want,” James Vickers, chairman international, reinsurance, at Gallagher Re told Reuters. (keep reading)
In Florida specifically, homeowners insurance costs have now generally risen higher than the mortgage payment for a middle-class family. This is not sustainable.
As far as the FedGov removing itself from subsidizing flood insurance, I concur. Then the REAL costs of this would be made painfully apparent. That would be an enormous, and much needed, shift in the whole paradigm.
Then again, so would getting Uncle Sam out of a lot of things he has no business in.
It will end up the only ones with insurance are folks with mortgages and lenders. Everyone else will self insure.
Property taxes on the home I rent out are over $12,000 and insurance is over $5,000. And I doubt the insurance is that good anyhow. 5% deductible on Hurricane coverage... which means if it’s ordinary Hurricane damage they pay next to nothing.
ESG and the Chinese (political) social scoring system used as a method of analysis for underwriters is buried in the brew. (Yes, I can show you evidence of this)
You sound like you are informed about the insurance business.
This is driven by cost push to building materials driving home cost up to huge levels, allowed by cheap interest, complicated by Federal Corruption. And many more related factors.
Where does this go? What comes after a boom, a collapse.
That is what the Globalist overlords and their bought POLs want. Then they can steal all the assets with money created right out of the air ( or something farther south).
I would have responded sooner, but we were out of town over 4th of July weekend. Turned off PC before we left. When I got home the computer would not start, replaced power supply and it is all back in order now.
Scale of things today is destroying all sense of community.
My family has owned/operated farms in this county since 1889. This county was not cut up until 1885. My ancestors and their neighbors had to support each other or they would have died.
Now “Mr. Globalist” (as Catherine Austin Fitts calls them) wants 1 bank in the either called the web to suddenly be in total control.
If they pull this off, all sense of humanity will be dead. It will be hell.
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