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 ...
You do have a point that the Governor should, with the legislature, create a feasible home/property insurance plan to benefit the states citizens. This is some of the purpose of modern government. Perhaps something along the line of California’sFAIR Plan might work in FLorida?
Thanks for posting those details—very informative.
Right now, people living in the center of Florida who have very little risk of hurricane damage
They probably have little risk of storm surge but the wind damage potential is about the same. BTW, flooding by surge is covered by the Federal Flood program which was created when the insurance companies decided to off load that problem to the feds. There is also a significant difference in potential of a major hurricane strike, cat 3 or higher, in the southern verses northern portions of the state, especially on the eastern side.
This coming hurricane season promises to be one for the records unfortunately due to a certain climate set up i.e. northeast blocking high and warmer ocean temps.
We pay upwards of $2K for fire insurance here in Butte County in the lower portion of the foothills. Your in laws probably know about the FAIR Plan and that will more in likey be the route they need to take.
All of us in the rural areas have lost our property insurance. The FAIR Plan only covers the structures, another insurance for the contents, etc...
It is a real problem in some areas of the country. At least we do have insurance through the FAIR Plan, which is in danger as its a pot of money derived from insurers operating in the state—if they pull out and they have been, then that pot of money dwindles...
At one time we were being charged a fee for living in rural areas under Gov Brown until the court said no. If that fee were to be applied to the Fair Plan Pot, then maybe it would work? Only those living in “rural” areas had to pay the fee.
Then again, what about the Coffey Fire in Santa Rosa? That was a suburban neighborhood that was not rural in the sense like we are rural here in the foothills.
There is another issue too that all those that live in potentially hazardous zones need to consider and that is communications during the disaster and afterwards. Our area has a GMRS Radio Fire Watch System operating from a repeater located safely in the valley floor that shoots the signal back up to us here in the foothills. We have a weekly net.
This could work for those in Hurricane areas too, Road closures, etcc are known by the local population before Law enforcement—such information is handed up and down. We do this now in our area and it works.
One of the guys in my office has a seasonal cottage in Wells, ME. It flooded two weeks ago in the coastal storm they had. It had salt water in it 5’ deep. It only sits about two feet off the ground. He has flood insurance. At minimum it needs to be gutted and rebuilt. He might have to raise it up. Which means tearing it down and start from scratch.
He is now talking about the different options he has in rebuilding. I told him that his insurance is going to double at least.
In many respects that’s already happening, if you look at where I live in Jacksonville, go out the beaches area, much of that area is where the truly wealthy live especially in South Duval and Northern St. Johns County.
There has to be a new approach to our thinking about Insurance in Florida, so many people have moved here and more of them are living close to the ocean, any decent hurricane tears up the houses of primarily newer homes.
The other solution or perhaps part of a new hybrid insurance system is establishing building codes that require homes to be built to withstand at least a Cat 3 hurricane, in low lying areas, they must be built on stilts high enough to handle a storm surge to a certain level.
You could do that to any new construction and require it on any homes built to replace homes destroyed in a hurricane. It would take time, but homes not built up to hurricane standards would eventually get replaced.
Sue Mother Nature, she’s at fault.
That’s not really true about the wind, if you live 50 miles or more inland, the chances of the wind causing significant damage is minimal and if the wind becomes a factor it’s because trees fall over onto homes.
Even when a Cat 5 storm hits Florida, Orlando has little chance of significant damage, Miami OTOH is at extreme risk of wind and storm surge danger.
If Floridians subject to hurricane’s don’t pay for insurance losses who else will? Who should?
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The problem is that residents of the rest of the state, not normally affected by hurricane damage, are carrying the weight of those who purchase expensive homes near the coast. Let those who choose to live near the coast pay a higher rate.
I’ve lived in Florida for 76 years, and only once or twice been hit with near hurricane force winds (75MPH).
Yea, I'm up in that area once a year usually, could not believe the video of the flooding. Lots of places on or near the water that probably had that type of damage. The cost to rebuild will be enormous given the cost of goods and labor these days. And insurance companies hate claims. I had tree damage twice in an old house, agent said they'd cancel me if I had another.
Same here in Polk Co.
Why is my solid 67 year old concrete high and dry home, metal roof, in the same risk pool as a millionaires beachfront palace???
There was a reason the old timers didn’t build on the beach.
Historically, hurricanes die down enough before they reach us therefore damage is an order of magnitude less. The homes in the area, other than some shingles and fallen trees here and there, are still intact after decades of storms. Homes are not disintegrated and swept away like you see in the coastal flood areas.
My home insurance policy, the only game in town at present, went up 43% this time around. I have no mortgage and may not write that check next year. Yet....I am to pay for mansions on the beach.
Yes, we need relief and reform.... present conditions are not sustainable.
““ Home owners insurance has skyrocketed here in Florida.l
Ahem….hurricanes.”
Wasn’t a heavier time of many Florida hurricanes during the Bush years? Also, a lot of insurance problems are related to govt edicts that make construction/rebuilds much more expensive.
If I ever build another home in Florida, it will be built using the Insulated Concrete Form (ICF) method of poured concrete walls, storm resistant windows, and a metal roof and I would think long and hard about being self-insured.
Exactly correct
“a lot of insurance problems are related to govt edicts that make construction/rebuilds much more expensive.”
Correct.
Building codes have gotten very detailed and very expensive to meet.
One electrician we know walked us through the details a while back—it was amazing. His view was that the code was total overkill meant to prevent the one in a million electrical fire scenario.
Not true! I am sitting in a town right now that is 135 miles as crow flies from gulf coast. During hurricane michael this town was devastated by cat 2 hurricane winds in 10/10/2018.
A hardened structure. Makes sense. Here in California, while building codes do not yet factor in wildfires, they do factor earthquakes—such as no more brick buildings, etc.
Yeah, a builder friend told me recently he completes new custom homes and the regs make them so airtight the people move in and get sick. He has to go back and sneak some outside ventilation into the house and then they recover and are fine.
After Super Storm Sandy hit CT they raised the height of the front two rows of beach houses to 13’ above the normal high tide mark.
I am surprised that Florida has not made this a requirement ever since Andrew. I know they changed that ALL 2x4 studs in Florida had to be a #2 grade stamp. They changed that all roofs needed hurricane straps.
It is true here in Florida, I can’t speak about your location, I’ve lived in Florida for over 60 years been thru multiple hurricanes, in the center of the state you have minimal risk which rises as you get closer to the ocean.
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