Posted on 01/22/2024 7:38:49 AM PST by devane617
As I said to another poster, of all the people moving to Florida, a sizeable percentage want to live as close to the ocean as their finances allow, often times their house is built on land that at one time was a swamp, it’s only natural when a hurricane comes thru the house gets destroyed.
I could see some type of hybrid insurance market emerging, the closer you live to the ocean the higher price you pay and the amount of coverage you can get gets reduced.
Those living on the oceanfront get no insurance for hurricane caused damage because they are likely self-insured, as you move inland and in the center of the state where your risk is significantly lower, you can get more insurance at a lesser cost, etc.
Right now, people living in the center of Florida who have very little risk of hurricane damage are subsidizing those homeowners who choose to live on or near the ocean and have a much higher risk of hurricane damage.
I could see a future where if you live within a mile of the ocean, you can’t get insurance unless you pay a fortune and even then, it might not happen, compared to those living inland who can get insurance at a reasonable price.
Ahem….wildfires, flooding, tornadoes in other parts of the country. What’s your point?
“Ahem….hurricanes.”
Ahem….price fixing and gouging.
“ But no one has ever explained how like magic the cost to rebuild multiplied by a factor of five within two months of a hurricane.”
Let me break it down for you.
“Supply and demand”. After a hurricane the demand for labor and materials increases tremendously while the supply of those things is relatively fixed in comparison, at least for a while.
Therefore the price goes up.
You don’t have to be Milton Friedman to figure that out.
L
He’s a broken record and can’t make a point.
This chaos is also coming to the sales of electric vehicles. The fire hazards of EV’s is going to end the insurability for new EV’s which will prevent anyone from financing a new one.
Florida was booming in the 1920s, until the 1926 Hurricane that hit Miami.
The State went into a depression for years.
“ Ahem….wildfires, flooding, tornadoes in other parts of the country.”
Try getting fire insurance in the Sierras in California. My in laws just went through that. It’s damned near impossible to get and if you do it’s very expensive. This is as it should be.
There is almost no private sector flood insurance available anymore. That’s now a quasi government program. Most insurance companies don’t even offer it anymore and if you build in a known flood plain they won’t even talk to you.
And tornados, while incredibly destructive, a much more localized than hurricanes. Tornadoes don’t wipe thousands and thousands of homes and businesses all at once. Hurricanes do.
It’s really not that hard to understand.
L
So here in California it is a similiar issue, excpet its wildfires. Here in the foothills of the Sierra Nevada everyone finds themselves dropped—and Lord help you if you have a mobile home...
So, its the California FAIR Plan, funded in part by insurers in the state, at least those that remain. Anyway, insurance is upwards of 2K a year these days. And inspectors come out to demand changes to your honme and property (Fair enough—I suppose)
Before we lost our insurance and had to resort to the Fair Plan, we were paying $2K /year so w aren’t really paying any more, but its not like the mere few hundred dollars we used to pay days gone buy.
While homeowners’ insurance may “average” 6K per year in Florida vs. a national average of less than 2K, I think that stat is a little misleading b/c of all the multi-million dollar homes on Florida’s coasts. That said, if you are stupid enough to build your “dream” home in a hurricane/flood zone, you deserve to pay through the nose.
Also, remember that Kamala Harris went to Europe, and gave a speech hinting that Ukraine might be admitted to NATO. This was very shortly before the Russians invaded.
I do not follow her schedule, but how many times has she gone overseas to give a speech?
And exactly how do you expect anyone in government to “fix” this?
Many in our area went to USA for help in Cailfornia—We could easily qualify for USAA—but we have a mobile home and as of this past week, USAA is no longer writing policies in California due to widlfire losses.
“Anyway, insurance is upwards of 2K a year these days”
How about $6k for 1,100 sqft?
Well, is some respects your plan does make sense, but that would freeze out some owners and restrict that area to the “elite”. The little guy/gal that services those communities as clerks, shoe salepeople, dental assitants, etc—would be forced to move further inland out of EV range.
City and County Governments issue permits for housing, and that includes in flood prone areas.
State, County and City Governments issue building codes and building code compliance affects insurance rates.
The majority of county and city government revenue comes from property taxes. A collapse in housing prices would devastate most local governments.
State and Federal government regulates insurance.
So, government allows housing to be built in flood prone areas, issues building codes that allow buildings to be built that will not withstand hurricanes, has a subsequent withdrawal by insurance because of the severity of claims after hurricanes, which ultimately leads to the collapse of local governments. Sounds like a government problem to me.
Another big issue down here is that government had regulations where HOA’s for condos were required to have reserves for maintenance but allowed HOA members to vote on whether to actually collect them. The result is that very few condo HOA’s have maintenance reserves. So then an apartment collapses in Miami that makes the national news, so the State changes the law to say that the remaining life of the components of a building and the cost of maintenance needs to be performed every few years by a licensed 3rd party contractor, and HOA’s can no longer vote to not collect the funds. This law just went into effect, and Condos have until Jan 1, 2025 to have the audits and reserves. What this means is that 90% of the condos in Florida are going to have special assessments within a year that will be massive because of all the deferred maintenance, and people won’t be able to sell because the special assessment may cost more than the condo itself. This will lead to a massive collapse in the value of condos in Florida, which may also bankrupt a lot of cities and counties.
Yes, the situation in Florida with insurance sounds very similar to the problems in California, with losses from brush fires being so big in recent years.
Some insurers are limiting policies in California and or pulling out of California entirely.
It is a problem because you cannot force insurance companies to do business in a certain state.
And good luck getting a mortgage without insurance.
I live near Daytona, and have a 3000 sqft house that was completed less than 2 years ago. My insurance is $18K/year.
Oh crap, and I thought we had it bad...At least our property taxes can only rise some 1 to 2 percent a year and are around $1100/yr these days. Six large ones is a very tough bite indeed.
I always wondered in the midwest (Tornado Alley) that homes and buildings would be built semi underground to mitigate damage—is that a feasible idea for any of you living in Tornado Alley?
To get back to your 6K—is that currently in Florida or somewhere else?
BTW we have five acres with mobile and out buildings—garage, barn, two sheds.
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