Posted on 01/22/2024 7:38:49 AM PST by devane617
The ongoing insurance crisis in Florida, fueled by the exodus of major insurers and the increased risk of extreme weather events, could trigger a downturn in the state's real estate market, experts told Newsweek.
Homeowners in the Sunshine State currently pay the highest insurance premiums in the country. Floridians pay private insurers an average premium of about $6,000 a year, according to the latest data from the Insurance Information Institute, or Triple I, according to Barron's and CNN Business, compared to the national average of $1,700.
Few people can self-ensure against the loss of their homes, and banks require an insurance policy to protect their collateral and provide a mortgage for a house.
The increasingly unaffordable cost of home insurance risks leaving residents uncovered, and thus unable to get a mortgage should they want to buy a new home, which could escalate to a statewide decline in the real estate sector.
"If you don't have an insurance policy, it's basically impossible to take out a mortgage," Benjamin Keys, an economist and a professor of real estate and finance at the University of Pennsylvania's Wharton School, told Newsweek.
(Excerpt) Read more at newsweek.com ...
Insurance
Mortgages
Commercial Real Estate
Electric Cars
I see a lot of dominoes that seem ripe for collapse.
It’s not a government problem to fix unless they created it.
If Floridians subject to hurricane’s don’t pay for insurance losses who else will? Who should?
“It’s not a government problem to fix unless they created it.”
The courts and FILLED with legal actions against Insurers. Some type of tort reform is needed, so, I see it as a GOV problem.
And do what exactly?
The same thing happened after Hurricane Andrew. The traditional insurance and reinsurance market could not handle the claims. So the capital markets were used as reinsurance and it took the pressure off. The same thing should happen again as long as you have a functioning market.
If you live in a Hurricane zone, best you can do is build to withstand a hurricane. And if you want to afford the insurance, start a sheetrock company because once that gets wet in a house it all has to be torn out and replaced.
Living here in Florida all my 60+ years, the State Government did nothing over the years, the local governments allowed homes to built on land that was once swamp land in low lying areas.
A sizeable percentage of people moving to Florida want to live as close the ocean as their finances allow which leads to more homes getting destroy when a hurricane comes thru which it eventually will if you live in Florida long enough.
This is stupid almost beyond belief.
People build homes smack in the middle of Hurricane Alley and expect someone else to cover them at little or no cost. It’s a known risk and every few years the storms do billions of dollars in property damage.
Then people complain when insurance companies raise premiums to cover losses that anyone with an IQ above 70 could have seen coming.
It’s like building a house in a known flood plain and then acting surprised when a flood happens.
Insurance is a business. They calculate risks and charge accordingly.
L
The Florida legislature had a special session over a year ago to fix the insurance problem. It does take time for the fix to take effect, or perhaps more is needed.
I’m glad that I have an almost endless array of coverage options for my home with USAA - I can change it all online without having to clear coverage with a mortgage holder - because the home is free and clear.
After H Michael I settled with Ins. Within a month the cost to rebuild multiplied five times. I did not get enough to rebuild my front porch. There was and is price fixing and gouging in Florida and that should have been looked at LONG ago.
newsweak dumping on Florida again?
I partially self-insure (HOA covers the rest) because I’d be stupid not to, and I live a block from the beach.
It’s a market. If insurers want to make money in FL, they’ll start coming down.
Allstate flat out cancelled policies AFTER Andrew and it doesn’t seem anything was done to them. They can still afford a lot of advertising obviously. Why couldn’t they afford to pay the claims back then?
Home owners insurance has skyrocketed here in Florida. DeSantis should have been addressing this crisis instead of galavanting around the country with his ill-conceived presidential run.
Still love my Governor!
Same thing happened/happens with those living in continually flooding river basins.
“ Home owners insurance has skyrocketed here in Florida.l
Ahem….hurricanes.
L
Is there any data that says that is true?
I mean, there may very well be increased LOSSES from hurricanes compared to 1950-1970 because of increased population and overbuilding on the coasts - but a lot of the worst hurricanes to strike Florida happened in the 1920s and 1930s, and after Andrew in 1992 it seems like there have been fewer.
Just sayin'
As a Florida resident now and two occasions before I understand what you are saying. But no one has ever explained how like magic the cost to rebuild multiplied by a factor of five within two months of a hurricane. There is and was price fixing and gouging and no one in FL gov did a damn thing.
As I said to another poster, of all the people moving to Florida, a sizeable percentage want to live as close to the ocean as their finances allow, often times their house is built on land that at one time was a swamp, it’s only natural when a hurricane comes thru the house gets destroyed.
I could see some type of hybrid insurance market emerging, the closer you live to the ocean the higher price you pay and the amount of coverage you can get gets reduced.
Those living on the oceanfront get no insurance for hurricane caused damage because they are likely self-insured, as you move inland and in the center of the state where your risk is significantly lower, you can get more insurance at a lesser cost, etc.
Right now, people living in the center of Florida who have very little risk of hurricane damage are subsidizing those homeowners who choose to live on or near the ocean and have a much higher risk of hurricane damage.
I could see a future where if you live within a mile of the ocean, you can’t get insurance unless you pay a fortune and even then, it might not happen, compared to those living inland who can get insurance at a reasonable price.
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