Pulling out totally seems like an odd decision to me.
fact is, people MUST have home and auto insurance. Its not as if people will stop buying it if its to expensive.
So why don't insurance simply charge the amount necessary to cover their expenses plus a (competitive) profit margin?
I suspect however, that if laws are passed to prevent "cherry" picking, you'll see rates rise for auto and other insurance as well. The excuse won't be risk, but something else the accountants will invent (which will end up subsidizing lines of business they cant seem to adequently underwrite)
This could hurt me. We have auto, disability and life insurance through USAA, but USAA will not insure our house, saying it's too close to the coast. USAA will probably drop our other forms of insurance, costing us a lot of money, rather than write us a homeowner's policy.
Thanks a lot, politicians. Way to create a new set of problems.
The insurance companies are being disengenuous telling us, on the one hand that they are hurting yet on the other hand posting record profits.
Insurance is one of the most highly regulated industries out there and that contributes to the problem.
NOTHING is uninsurable with the proper premium.
Any insurance company writing in Florida that doesn't account for some catastophic losses isn't underwriting properly.
So how is it that in a time when most insureds did not file claims or have large losses that premiums double and triple?
The State has no choice but to step in. Non homesteaded properties and secondary residences are becoming uninsurable. That means that snowbirds can't insure their winter home. That also means that landlords now find that they can't insure their properties.
People can't insure their properties but can't sell either, because of lack of insurance!
No, it's not the way to run a state. Insurance is not a free lunch or platinum gift card with no spending limit. The more a state meddles with regulating the insurance industry the more harm they do to their entire business community via the law of unintended consequences.
The insurers make money in other states but lose in FL. That means they stop insuring FL.
What will happen is that you will pay a lot for car insurance in FL to subsidize homeowners.
By the way, I say the bigger the profits for insurance companies the better. The real problem is when insurance co. lose money. Then you have insolvency, govt. bailouts, customers who don't get paid, employees who get fired and shareholders losing their investments.
Profits are good, Loses are bad.
Folks keep in mind, insurance is MANDATORY in many situations.
For example, in FL you MUST have auto insurance so the insurance companies have a captive market.
Insurance is not a free market product. In fact it is highly regulated because of past games with the insurance companies which literally wrote polices which stated your insurance is automatically invalid if you actually make a claim.
Should policyholders in other states, with lower risk, subsidize those who choose to live in FL?
Insurers made a lot of money in FL on homeowners this year, as there were no hurricanes. However, they must accumulate a reserve somehow with which to pay for future hurricanse. If premiums are set too low by the state, when the big one hits reserves will be inadequate and the insurers won't have the money to pay out to claimants. Blood and turnips and all that.
It is estimated that a repeat of the Great Miami Hurricane of 1926 (which did $2B in damage in 1926 dollars) would cost $100B to $200B today despite the improvements in construction methods. And that's from a single hurricane. A couple years ago FL was hit by 5 in one year.
Florida is also very hard on hospitals and doctors--Florida is a state for lawyers. And that has to do with how people vote.
Oh they'll now offer insurance, just at premium rates that will be the equivilent of the GNP of many third world countries.
And if anyone wants to watch the special session you can find the live links here
http://www.wfsu.org/tv/live_webcasts.html
Uh oh. We've had State Farm Homeowner's for years but I'm told they aren't writing new homeowner's policies. Will they withdraw from auto and homeowner's? Time will tell.
People don't seem to understand that this kind of behavior either makes the cost prohibitive, or makes service unavailable. It's like the hospital ER--the public tries its best to put it out of business, then whines when the public succeeds.
The same thing in FL that happened here in Washington state. The state here put limits on health care insurer's so they bailed out. The few remaining health insurer's raised their rates. In FL, insurance companies will bail out leaving those residents without any sort of insurance.
Insurance companies were allowed to create Florida subsidiaries which allows them to complain about the huge losses in those subsidiaries.
The insurance industry is already heavily regulated and the companies are allowed to collude with each other. It's an industry that has never been compatible with the free market.
It's about time!!!! If Insurance companies only want to cover the safe areas - they can leave. Why should they get the profits on protecting nothing and the citizens of Florida have to pick up the real risk. Go for it Charlie.
What the Governor is proposing will cause many insurers to drop Florida all together and the price of property casualty insurance will sky rocket.
I checked on my insurance payment this year as my "mortgage" payment hasn't changed at all.
Amazingly enough, living near Orlando, my insurance hasn't gone up a bit in the past few years.
I should go do some major knocking on wood now. Be back later ;)
ping...