Florida Insurance Crisis Spells Mortgage Disaster

NewsWeek ^ | 01/22/2024

[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.

[FLNittany]

The biggest damage done by Hurricane Agnes in 1972 wasn’t anywhere near the Atlantic Coast - rather the Susquehanna Valleys of PA, and on down the river to the Chesapeake.

[Justa]

The winter homes built in West Central FL, near the coast in the ‘50s and earlier are all single story concrete block. That’s why they’re still around while the speculator stick houses are long gone.

We shouldn’t have to subsidize shyster developer housing scams -3 story McMansions “On the Beach” -which payout millions in insurance when totaled in the first Cat 5.

[devane617]

No deals yet. Prices seemed to have stabilized at outrageous .

[devane617]

Ditto...I saw first-hand during Hurricane Michael how true your comment is. A couple 50’s style back houses were all that were left standing.

[devane617]

style back houses=style block houses

[Organic Panic]

Unless Ron can control the weather, like George bush when he steered Katrina in to New Orleans, it isn’t likely to solve insurance companies refusal to keep insuring Florida coast lines. And the “solution” would of course be a massive government program. (facetious of course.)

But... I wonder. Could it be a good time to just get a vacant piece of land, park an RV, and not worry about insurance? Just get out of Dodge when the hurricanes are a’coming.

[starflyte1]

I live in Central Florida and have looked at waterfront places in Stuart. The condo association must have insurance and there is no control how much will be paid. All depends on cost of insurance. So insurance paid by the association has to keep going up. And up.

[Rlsau1]

Government is responsible for much of the problem by over regulation. The vast majority of claims are in the coastal areas, but the insurance companies aren’t able to price their premiums accordingly. The political class and their supporters make sure the pain is spread in a socialistic manner due to their use of those coastal areas. The next big problem if FRAUD which is aided and abetted by the Florida Bar Association and, once again, the state government. In my time here it’s been one fraud after another. We get a lot of lightening so there are a lot of claims for electronics (real or not). Then there was the sink hole scam, then the water damage scam, then the roof scam, and it never ends. The auto injury scams are just unbelievable,and there’s not much being done about that either. It will take a concerted effort by the state, the Bar Association, and law enforcement to get the situation under control, but too many are making too much money with the the status quo to have much hope of change.

[Rlsau1]

Government is responsible for much of the problem by over regulation. The vast majority of claims are in the coastal areas, but the insurance companies aren’t able to price their premiums accordingly. The political class and their supporters make sure the pain is spread in a socialistic manner due to their use of those coastal areas. The next big problem if FRAUD which is aided and abetted by the Florida Bar Association and, once again, the state government. In my time here it’s been one fraud after another. We get a lot of lightening so there are a lot of claims for electronics (real or not). Then there was the sink hole scam, then the water damage scam, then the roof scam, and it never ends. The auto injury scams are just unbelievable,and there’s not much being done about that either. It will take a concerted effort by the state, the Bar Association, and law enforcement to get the situation under control, but too many are making too much money with the the status quo to have much hope of change.

[V V Camp Enari 67-68]

You are a teller of truth! Thanks!!

[Svartalfiar]

Good plywood used to cost $8-10 per sheet. During lockdowns the same stuff hit $60-80. Each. They’re down to maybe $30 now, so it’s still crazy expensive compared to a couple years ago.

And every other piece of lumber has gone up just as much!

[JohnBovenmyer]

I’m in the midwest so can’t claim local knowledge. But I’m trying to pay some attention. I had friends living in Paradise who were lucky to be out of town when it burned. Different rates of big fires in the mostly privately held East vs. the mostly governmently held land of the West suggests that folks trying to protect their own capital somehow get better results than folks who lack that motivation. Some of it could be differing terrain and differing local weather patterns. But at least some of the involved terrain and weather should have matches in the East, yet the results don’t seem to match. Power companies are pretty regulated in general. If fires are being sparked from the PG&E transmission lines is it being allowed to minimize tinder build up around them? Is it even allowed to put access roads into the wilderness to make tinder removal, and efficient firefighting when necessary, possible? If being allowed only to have, but not to maintain, a transmission network the company doesn’t deserve all the blame. And certainly doesn’t deserve to have its fees converted into a de facto judicially mandated tax on energy use by the rest of its customers, in lieu of the up front carbon taxes the politicians desire but aren’t willing to pass. Although to the extent corporate policy and lobbying parallels and shares bad governmental land management policy both guilty sides should share in the responsibility.

[NelsTandberg]

Pulled my permit 2005. Retired biophysicist and biomed engineer, Built for the environment. Taught the county building and zoning everything from insulation types to make-up air for wood stoves.. Neither need nor do I want their 'help'. Inspectors love me!

Lived on a 60' Norwegian SAR vessel for years. You learn limitations in the Arctic and N. Atlantic.

My house the morning after Michael. Garage slab at +7MSL. Habitable area floors at +15. Designed structurally for Cat 4 sustained, but fenestratiions only Cat 3+. Designed & built it myself. Photos taken after walking 530 ft up from my dock footer to make certain the boat was still on her mooring. Self-insured so far. When I get my CO, will negotiate with USAA. Neighbors in 3/4 mi radius come to visit for two nights while the eyes pass over.

[NelsTandberg]