Quote:
Originally Posted by Mathguy
You lived in Florida for how long and never figured out it was the state controlling everything all this time for homeowners insurance?
It's a political issue and they interfere mightily which is why the state has seen huge price spikes over the years.
Let's put it another way, if it's a rigged game for the insurance companies then why don't they want to write homeowners insurance there? 
The state politicians put a lot of effort over the years into making sure they didn't get blamed and it worked pretty well, something to think about. |
There are so many areas where your response is wrong to the point of weirdness that it is hard to know where to begin.
Your first paragraph/sentence is a personal attack that is ill-constructed, a poor attempt at mind reading, and intentionally attempting to be demeaning. Don't pull that with me.
I lived in Florida for around twenty years. Yes.
I understood the state government "meddling," which began in earnest around the time of Andrew. I understood WHY Citizens was created. I understood WHY windstorm was separated out. I understood how the Fed mandated flood insurance was forced in and why. From your gloss/rant, it appears YOU don't have any understanding of the what, why, when, where, and how.
The spikes in rates are from a number of causes.
In many states, your pushback against insurance "fiduciary responsibility" in denying claims or shorting the payout are limited. IOW, you are screwed when your insurance refuses to pay. In Florida, state law allows that. Unfortunately, Florida has more attorneys than Carter has liver pills, and they sue at the drop of a hat. The population of attorneys is not under control of the state.
Insurance companies don't like to actually pay what they have obligations to pay, and they don't like expensive court battles. Insurance companies can (and do) go where the pickings are good, and the losses are small. Surely you know that. A few decades back, there were conservative insurance companies (and even MUTUAL insurance companies) and for high risk there were only a few companies like Lloyd's of London. When the profits insurance COULD make became recognized, mutuals were phased out and for-profit became the rule.
The state insurance "Citizens" was created while the insurances companies WERE leaving in the first exodus, and refusing to insure just about anyone, and charging crazy rates to those they did. It was intended as an insurance of last resort to keep the state real estate and commercial growth from falling apart. Those economic areas were and are much more important and a MUCH larger market sector than insurance. Money wins in politics.
Now get down to the nitty gritty. There are some areas of the state that have been huge moneymakers for developers from the days of Flagler and the East Coast Railroad. They were literally selling swampland. They literally dredged to create a spoil island called Miami Beach. They were unobstructed by a state government that was about as Republican business friendly as it could get.
The hurricane of 35 took out the railroad across the keys and people got real sober about development for a few years, but then, as now, that sobriety only lasts a short time before the lure of development re-emerges. In a state with weak laws, more idiotic places to build are turned into expensive properties.
Sanibel Island is a barrier island. It never ever should have been developed. The reason why just became apparent to many.
Insurance companies WILL insure if the actuaries compute that the gains are significantly more than potential losses. People who are idiotic and so starry-eyed Pollyannas, with more money than brains, build or buy in stupid places, ignore the high insurance rates as a minor inconvenience, and then express shock and dismay when their castles built on sand are destroyed. They also have money to hire attorneys and the attitude to use them.
What happens then to the seniors who prudently built inland, above flood levels, and using construction that withstands wind? Their homes weather the storms with minimal damage, yet when the next premium comes around the rates are hiked. Why? Because of two major factors - the greed of the insurers wanting to gamble for big bucks, and the 2% population that think their sh** don't stink, and everyone else has to support their lifestyle. That many of those people with damaged coastal homes happen to be politicians and insurance company executives and real estate developers is ... just a coincidence.
You CANNOT separate big money and politics these days and claim politicians as left wing floozies who are socialist or communist or other such fabricated epithets. When you attempt to blame the woes and failings of insurance on politicians and government, you are blaming the tail for being bitten by the dog.
When the going gets tough, many of the tough get going. I saw what was shifting in Florida, how the loan crisis was about to crash and burn, how insurance was going to continue to benefit the stupid and greedy at the expense of the prudent, and got out. It was simply time.
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