Florida is uninsurable.
The solution is to gut the state, or let all homeowners go bankrupt so they learn their lesson.
Bailing or no bailing isn’t going to solve any issue. Come next hurricane, rinse repeat.
You want a beach front property in FL? Go right ahead, just plan to rebuild it every 5 years with your own money.
Florida is insurable IMO, but not for the price that people want to pay or the amount of risk in terms of wind/storm deductibles they want to bear. As a result, it’s been popular politically to spend taxpayer dollars to subsidize the cost and for the insurance commissioners office to fight any large rate increases even when warranted.
Yeah, I used to work under very smart actuary who was fond of saying “you can insure anything … if you understand it”.
We focused on a few niches that we’d taken the time to understand that many of our competitors had not. (And our competitors could say the same about us and different niches.)
The issue here is that the people who understand the Florida property insurance market say it can’t be insured for prices the Florida regulator will allow. Which means that definitionally every single insurer in Florida either doesn’t know what they are doing or knows that they are going under the first time there’s a major hurricane and just wants to make as much as they can in the meantime.
It’s a bad situation that is solely the fault of the Florida insurance department. (I mean unless you want to get into blaming cars and global warming.)
My statement is a memory of what my friend said and is no doubt approximate. If he’s 70 miles in one direction and 90 in the other, I’m going to say close enough.
There’s a huge difference from coast to 5 miles inland to 10 miles inland … I don’t there’s actually much difference from 50 miles to 100 miles
Also, most of northern Florida is probably insurable, once you get off the coast.
Well I did close with
I’m someone intimately familiar with the FL HO market. I do NOT work nor have i ever worked for any ifbthe companies in the article. However, I am under some restrictions on what I can and/or should say publicly so I’m probably only going to make a couple statements/points on this here.
IMO:
For the most part, the FL OIR is following statues when approving/disapproving rate filings. It’s extremely unfair to place a majority of the blame on them. (And this is comimg from someone that moans incessantly when having to deal with them.)
The majority of FL IS insurable, especially if you require flood coverage.
The entire state is considered coastal for good reason. Building codes and code enforcement are considerably better the closer you are to tidal waters. A property 50 miles inland gets “hit” more often than a property right along the coast. While the severity MIGHT be lower, frequency plays a role here as well.
Finally, don’t look at images from the news right after/during an event and make assumptions about damage.
Since I was one of the critical posters, I agree that the majority of blame does not fall on the OIR. The majority of blame for the current dysfunction falls on the state legislature, and specifically Citizens. However, there’s plenty of blame to go around.
I know of a couple of large national insurers that have a FL-specific subsidiary for the sole purpose of isolating insolvency risk to just the policyholders of FL.
FL OIR also keeps wanting these insurers^ to use the surplus of the parent company in their calculations for the profit provision.
^ I’ve done work for the documentation of this profit provision for my company along with doing some rate filings for commercial property for one of the national insurers; and I assume our experience is similar to the other companies given the political environment.
The larger national companies likely have a state-specific subsidiary for FL personal lines (excluding auto) and will have a combination of reinsurance set up both internally (some layers reinsured by the parent company) and externally with a couple of reinsurance companies.
I don’t recall if FL has a state-specific facility for reinsurance (I don’t think so);
Forgot about FHCF; but will add that FL will also place an assessment to any remaining companies still writing in the state for those companies that do go insolvent–including Citizens (as others have pointed out).
One result of a company that does go insolvent: the executive officers of that company can not become an officer for any other insurer in that operates in that state.
IMO, one party that should be included in any class action suit–in addition to these regional insurers–is the state of FL for creating such an environment for the insurance industry.
FTR, State Farm is still writing in FL. I followed that situation rather closely in the day, and when the politicians saw that the result of State Farm exiting was that Citizens became the market leader in the state, there was significant reform in rate filings to get rate increases implemented.
IIRC, FL OIR is still not allowing for adequate rates in terms of their catastrophe provision. If the non-cat portion of their experience is inadequate, then a rate change to make that adequate is usually allowed. But pretty difficult to show “inadequacy” for the cat provision (at least to FL OIR).
But I would speculate part of the problem in that scenario is that many of these smaller regional carriers do not place much of their profit in good years into surplus and are relying on underhanded tactics (like what’s mentioned in the OP’s article) or some form of bail out when the wind blows terribly.
Ah, that’s good to know; I didn’t realize that.
First, I think the drawing line is something like 1,000 yards (~0.5 miles) from the waterline as the “no write zone” for many insurers for those southern coastal states. Some insurers will have a “100 mile” no write zone (for the other gulf states) for the reasons that Maphisto mentions here.
And in terms of a hurricane, the issue on the coast isn’t so much “wind damage” (to exclude it) as that within that 0.5 mile range, it become more difficult to assess damage as being caused FIRST by wind or water. Even more so if all that remains is a slab.
I agree with MAX that there is more than the OIR is at play in regulating rates in FL and that the legislature has a lion’s share as the source of many of the insurance industry’s problems; however, the Insurance Commissioner (head of the OIR) is an elected position in FL, and many would-be FL politicians see this position as a stepping stone to either the governorship of FL or political office in the US Congress.
And what I’ve seen for many states is that the departments of insurance (like the OIR) establishes the regulations that the department will follow as their interpretation of some of the statutes/laws enacted by the legislature that end up being somewhat vague in terms of details.
Going to my earlier statement about the class action suit should include the state of FL as part of the litigation. I’m not sure that the legislative body can be named in a law suit, but the OIR can be. Doing this, there will be a clear record of what’s in the control of the insurance commissioner and what’s the fault of poor legislation.
In reflection, it also seems that it would be good to include past insurance commissioners in the suit to further establish the long-running nature of this problem.
I suspect they tend to pay fat bonuses and perhaps send a dividend to their stockholders in good years. That makes it really hard to get the money back. (I don’t know this, just guessing.)
Fair enough.
shoulda called it hurricane Eoin imo
Just let the state burn down. It’s a PoS state run by clowns
I thought the state was run by Florida Man.
Isn’t he running for president ?
I don’t think it’s official yet, but yes.
Fair. It is easily possible that I was blaming the wrong subset of the Florida state government. I knew the blame lay with the state government but not necessarily which piece(s).