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...Seriously though, um....the insurers are trying to leave the state and the state is now insuring most of the homes.
I'm obviously missing something in the economic analysis where businesses that are alledgedly making a lot of money are trying to write less (or no) business.
They aren't reducing their business throughout the entire region. They're only abandoning coastal counties. This means that if you have an older home in a "coastal county," even if it's miles from the coast, you'll pay a fortune for insurance and usually be relegated to Citizens. This means that Citizens gets all high-risk, and private insurors reap the rewards of cherry-picking. Not fair, not pretty - and there's going to be a very unpleasant surprise for everyone if the Big One hits; we'll all get socked with nice big "assessments."
Quote:
I'm really struggling with the whole concept of the state having to force insurers from leaving. Please explain this to me?
They should let the private insurors leave - and leave the entire state, not just the coastal counties. Then, everyone in the state could have state-underwritten insurance, which would spread the risk and spare everyone from those "assessments" which result from one single insuror having the bulk of high-risk business. And another thing - if the legislature really wanted to fix the situation, they should match the premium to the ability to pay PLUS making an all-out effort to drastically reduce premiums paid by businesses. Commercial insurance is a nightmare - and if this isn't fixed, it's going to take a tremendous toll on our economic base and drive job-creating businesses right out of the state.
They aren't reducing their business throughout the entire region. They're only abandoning coastal counties. This means that if you have an older home in a "coastal county," even if it's miles from the coast, you'll pay a fortune for insurance and usually be relegated to Citizens. This means that Citizens gets all high-risk, and private insurors reap the rewards of cherry-picking. Not fair, not pretty - and there's going to be a very unpleasant surprise for everyone if the Big One hits; we'll all get socked with nice big "assessments."
They should let the private insurors leave - and leave the entire state, not just the coastal counties. Then, everyone in the state could have state-underwritten insurance, which would spread the risk and spare everyone from those "assessments" which result from one single insuror having the bulk of high-risk business. And another thing - if the legislature really wanted to fix the situation, they should match the premium to the ability to pay PLUS making an all-out effort to drastically reduce premiums paid by businesses. Commercial insurance is a nightmare - and if this isn't fixed, it's going to take a tremendous toll on our economic base and drive job-creating businesses right out of the state.
Assessments are caused when there isn't enough money to pay claims. The big assessments are because citizens sells it's insurance below cost and then can't pay claims. For example, after the 2004 hurricane there were two Citizens assessments totaling almost 10%.
Private insurers aren't writing coastal properties because the state, which approved the rate increases, decided for political gain to insurer the coastal properties for less than the required rate and pray a hurricane doesn't hit.
How can a private insurer compete against citizens if they can sell the policies at a loss and then pass those losses on in the form of assessments?
Match premiums to ability to pay? So you are saying that you would pay higher premiums to help others or that you want someone else (preferably out of state) to eat the cost for you to live within a short drive of a beach?
Just wondering from your experinece if you notice people moving out of Florida due to hurricane factors over the last few years, or do you see people moving to FLorida in droves still disregarding the risk of mother natures wrath..
I don't think the hurricanes have anything to do with the housing market. The biggest increase in real estate was in 2005 after our back to back hurricanes. I think at this point it's just another coal to throw on the fire. If you want to leave Florida, now you have hurricanes to whine about too.
For the record, I like Florida a lot and will strongly consider moving there when I retire.
(Warning satire ahead)
At that time, I would like to buy a 750,000 beach front home with a boat but it's really going to stretch my budget so I'd like all of you to pass the hat and pay my utilities. "We", meaning me, shouldn't have to pay for basics like electricity or insurance and since I will be poor due to my home and boat I expect the rest of you to live communally in some interior swamp land so that you will have leftover money and can pay according to your means.
(end satire)
The level of chutzpa required to demand others subsidize the ownership of a home likely worth 200k or more, especially when it's likely worth many times what was paid for it is jaw dropping. For those that got caught up in speculating, you got greedy, see day trading and internet stocks and many of you were old enough to have seen the silver collapse in the 1970's too.
For the few people just getting squeezed, then I feel for your situation and I hope you work things out.
This is the united states, we have social programs to aid truly POOR people with things like oh say....food and keeping them from freezing to death etc.
I agree that hurricanes are not the reason people leave this state. I heard of one couple who did move (they were involved in Hurricane Charley) they moved to Alabama and then they got hit by a tornado. Now they want to come back and are priced out of the housing market, for now. This seems to be improving although the property taxes and insurance rates are still increasing.
My parents re-relocated back up to Ohio from Sarasota. They couldn't afford their insurance on their house. And I feel they were taken for roof repairs in 2005. Why would it cost an elderly couple $17,000.00 to put a new roof on??? They are not the brightest bulbs in a box, but they claim that was the going fee.
My parents re-relocated back up to Ohio from Sarasota. They couldn't afford their insurance on their house. And I feel they were taken for roof repairs in 2005. Why would it cost an elderly couple $17,000.00 to put a new roof on??? They are not the brightest bulbs in a box, but they claim that was the going fee.
You might want to google the phrase "demand surge"....I'm not positive but it might explain the situation.
Seems like your parents sold their house prior to the markets subsiding so they probably did ok on that I'd hope.
We moved and people I know did not move because of hurricanes. It was for many reasons, ridiculous housing prices, insurance rates, property taxes, poor education, and finally wages don't match cost of living.
Match premiums to ability to pay? So you are saying that you would pay higher premiums to help others or that you want someone else (preferably out of state) to eat the cost for you to live within a short drive of a beach?
Under the current system, since I don't live on the beach I'm subsidizing those who can afford to live there.
I'd much rather my premiums help out those who have less than I have, than those who have more.
Mathguy,
It took them 19 months to sell the house. They put it on the market in Sep of Sep 05 and it finally sold April 07. So the market was already saturated. I'm surprised they sold it.
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