Politics

[Brent in Az]

As @PARA45 correctly stated, many property insurance carriers did not have enough funds and defaulted on tens of thousands of claims post-Hurricane Andrew... Back then, Florida never required insurance carriers in the State to prove they had the liquid assets to pay in the event of another catastrophic storm like Andrew. Many folks who "thought" they were covered got nothing...

That reality led to the State's creation Citizen's Insurance which to this day, provides about 70% of all the property insurance in Florida. However, because of their own growing unfunded liability, Citizens has been doing a mass shedding of policy holders in the last 3 years... Citizens now has the right to drop you if they can provide another insurer that offers a premium that is no higher than 20% of the Citizens rate being offered. Governor DeSantis has offered incentives for more insurance carriers to enter the market in Florida which has offered some relief to Citizens unfunded burden. The bad news is that most, if not all, of these carriers are jumping their rates significantly after the first year of coverage or as an assessment in the wake of a recent hurricane even if the storm did not impact the insured's immediate area.

The second, and mostly unspoken part of the problem since Andrew has been the massive number of frivolous claims that have been submitted in the wake of these storms resulting in premiums going through the roof. For years, many homeowners have filed claims for new roofs, patio enclosures, etc., in the wake of a storm even though the storm itself caused minimal or no damage. In other words, people were getting new roofs, new fences, and new patio enclosures, for storms that had no direct impact on their area. This is possible because Florida law allows the use of private third-party adjusters that will qualify an often-inflated claim which must be honored according to the current coverage rules. Adding salt to the wound, every policyholder under Citizens gets hit with a rate assessment every time there is a storm in the state regardless of whether or not the storm impacted them directly...

On top of all of this, buyers and sellers are having a huge problem during the sale of a home where the assessed value of the home is drastically different than the selling price. Insurance companies will not offer coverage on homes that are selling way over market value, and banks will not finance mortgages on homes that do not have enough insurance to cover the replacement value of the home resulting a huge number of potential buyers who cannot qualify for financing because they cannot get insurance...

Suffice to say, homeowners' insurance in Florida is a major issue for most residents... I know many homeowners including myself that no longer have a mortgage who are rolling the dice and not paying for the "windstorm" coverage which is the hurricane damage part of the policy... Unfortunately, most homeowners are not in the financial position to self-insure in the event of a catastrophic storm.

Suffice to say, the homeowner's insurance situation in Florida is a mess with no viable solution in sight... It's one of the very few criticisms I have of Governor DeSantis who has not addressed this crisis aggressively enough for whatever reasons. The folks in Cali will likely have to create some kind of State sponsored insurance company like Citizens, however, they will likely face the same issues that we are dealing with in Florida when the pool of insured gets so large it becomes an unfunded liability...

I wonder if the political side of that situation has to do with the powerful insurance lobby?

 

[BSO Dave]

Scott, I know the situation of the Indegenes almost as well as you do, believe me.
Still, everyone here is happy not to be an indegene, right?
Just because a few tribes have a casino that is ultimately controlled by the mafia
and receive monthly state benefits.
We all know why they come, don't we?
Do we get paid for losing wars ?

No, we are paying.
Germany has paid bitterly for it and still does today, something the USA would never think of.
In addition, we lost many provinces that had 1,000 years of German history and culture behind them and were lost. Look at the map of 1914 and today, if you are interested.
America also started wars and not so less, not just the Nazis.
Sine ira et studio.

You are missing the point completely...

Your comment about how America has treated the "indigenous" people (meaning the American Indian) was obviously meant as a slight inferring what you see as America's unique penchant for cruelty or brutality which is utter nonsense...

My point, and I believe Scott's point was that America is often framed as some sort of brutal conqueror by those who have a very narrow or naive understanding of world history... America settled no differently than any other country on the planet... Every single country and culture in existence today was created as a result of war and brutality.... Yes, wars have consequences and human beings suffer cruel and brutal hardships in the process... This is a world-wide reality of all men past and present, and not one unique to America... The responsibility is one of human nature, not one of citizenship...

America haters are always trying to historically portray America as the only civilization that ever waged war on another country... They do the same thing with the concept of slavery suggesting that it's an American-born concept neglecting to mention that it has existed since the dawn of man and practiced by nearly every race and culture for thousands of years long before America was even a settlement...

 

[sgt_zim]

Scott, I know the situation of the Indegenes almost as well as you do, believe me.
Still, everyone here is happy not to be an indegene, right?
Just because a few tribes have a casino that is ultimately controlled by the mafia
and receive monthly state benefits.
We all know why they come, don't we?
Do we get paid for losing wars ?

No, we are paying.
Germany has paid bitterly for it and still does today, something the USA would never think of.
In addition, we lost many provinces that had 1,000 years of German history and culture behind them and were lost. Look at the map of 1914 and today, if you are interested.
America also started wars and not so less, not just the Nazis.
Sine ira et studio.
KF

You act as though the indigenous weren't constantly "stealing" land from each other via conquest. Those who'd been living under Westphalia for several centuries were better organized and were just better at it than the indigenous were.

Rousseau was an idiot.

 

[BSO Dave]

I wonder if the political side of that situation has to do with the powerful insurance lobby?

What other explanation could there be?

DeSantis is the one guy I really thought would be immune to the political influence...

His hands are tied to the extent that any legislation regarding the insurance crisis needs to go through the State House. What he has done is offer rebates and small property tax credits to a very small number of the lowest income folks, but the vast majority of middle-income homeowners are the ones bearing the brunt of the burden with no relief.... Citizens did provide that relief for years until it has grown so large it is no longer to fund its liability and even their rates have skyrocketed in recent years.

I'm not sure what the future solutions will be, but addressing the fraud and frivolous claims would be a start...

 

[WAB]

As @PARA45 correctly stated, many property insurance carriers did not have enough funds and defaulted on tens of thousands of claims post-Hurricane Andrew... Back then, Florida never required insurance carriers in the State to prove they had the liquid assets to pay in the event of another catastrophic storm like Andrew. Many folks who "thought" they were covered got nothing...

That reality led to the State's creation Citizen's Insurance which to this day, provides about 70% of all the property insurance in Florida. However, because of their own growing unfunded liability, Citizens has been doing a mass shedding of policy holders in the last 3 years... Citizens now has the right to drop you if they can provide another insurer that offers a premium that is no higher than 20% of the Citizens rate being offered. Governor DeSantis has offered incentives for more insurance carriers to enter the market in Florida which has offered some relief to Citizens unfunded burden. The bad news is that most, if not all, of these carriers are jumping their rates significantly after the first year of coverage or as an assessment in the wake of a recent hurricane even if the storm did not impact the insured's immediate area.

The second, and mostly unspoken part of the problem since Andrew has been the massive number of frivolous claims that have been submitted in the wake of these storms resulting in premiums going through the roof. For years, many homeowners have filed claims for new roofs, patio enclosures, etc., in the wake of a storm even though the storm itself caused minimal or no damage. In other words, people were getting new roofs, new fences, and new patio enclosures, for storms that had no direct impact on their area. This is possible because Florida law allows the use of private third-party adjusters that will qualify an often-inflated claim which must be honored according to the current coverage rules. Adding salt to the wound, every policyholder under Citizens gets hit with a rate assessment every time there is a storm in the state regardless of whether or not the storm impacted them directly...

On top of all of this, buyers and sellers are having a huge problem during the sale of a home where the assessed value of the home is drastically different than the selling price. Insurance companies will not offer coverage on homes that are selling way over market value, and banks will not finance mortgages on homes that do not have enough insurance to cover the replacement value of the home resulting a huge number of potential buyers who cannot qualify for financing because they cannot get insurance...

Suffice to say, homeowners' insurance in Florida is a major issue for most residents... I know many homeowners including myself that no longer have a mortgage who are rolling the dice and not paying for the "windstorm" coverage which is the hurricane damage part of the policy... Unfortunately, most homeowners are not in the financial position to self-insure in the event of a catastrophic storm.

Suffice to say, the homeowner's insurance situation in Florida is a mess with no viable solution in sight... It's one of the very few criticisms I have of Governor DeSantis who has not addressed this crisis aggressively enough for whatever reasons. The folks in Cali will likely have to create some kind of State sponsored insurance company like Citizens, however, they will likely face the same issues that we are dealing with in Florida when the pool of insured gets so large it becomes an unfunded liability...

Great synopsis. The bottom line is you can’t beat the math. Massive events resulting in mind boggling liabilities have to be covered with increased premiums across the board. Stretched razor thin, these companies also have to reduce their risk exposure, resulting in cancelled policies. The other dynamic that has to pass through to premiums is construction costs. Premiums have to reflect the Biden effect on material and labor.

 

[Altitude sickness]

I surely would not want to insure coastal Florida homes with my money.

Pretty soon we lower risk policy owners should have companies bidding on underwriting our policies.

 

[WAB]

I surely would not want to insure coastal Florida homes with my money.

Pretty soon we lower risk policy owners should have companies bidding on underwriting our policies.

Agreed, I mentioned earlier that I have no interest in insurance companies in my investment portfolio.

 

[BSO Dave]

Great synopsis. The bottom line is you can’t beat the math. Massive events resulting in mind boggling liabilities have to be covered with increased premiums across the board. Stretch razor thin, these companies also have to reduce their risk exposure, resulting in cancelled policies. The other dynamic that has to pass through to premiums is construction costs. Premiums have to reflect the Biden effect on material and labor.

Unfortunately, you are absolutely correct...

Even current coverages offered by Citizens will not cover the cost of a total loss and complete rebuild in today's market... They typically offer a coverage of 20% above the assessed value which can be half of the actual cost to rebuild...

After Hurricane Andrew, the building codes changed dramatically because a lot of the catastrophic damage was due to relaxed building codes which were in allowed for years during the housing boom of the late 80's and early 90's... A significant portion of the damage that was incurred during Andrew was in the newest residential subdivisions mostly constructed from T-1 11 partial board and not CBS block. These neighborhoods where nothing more than glorified mobile homes and got reduced to match sticks.

The new building codes, which are now affectionately referred to as Miami-Dade County Hurricane codes, are still in place in Dade, Broward and Monroe Counties... However, ironically, they are not required throughout the state for the very labor and material cost reasons you mentioned... They still allow new wood-frame construction all along the Gulf coast which is mind-boggling to me... Many of structures lost in recent storms are already being rebuilt with wood frame construction.... I can only assume the State allows this because following Miami-Dade codes would be unaffordable to the vast majority trying to rebuild, and the State wants to do whatever they can to encourage rebuilding and supporting the labor and construction industry... Understandable, but at what inevitable cost?

 

[sgt_zim]

Great synopsis. The bottom line is you can’t beat the math. Massive events resulting in mind boggling liabilities have to be covered with increased premiums across the board. Stretch razor thin, these companies also have to reduce their risk exposure, resulting in cancelled policies. The other dynamic that has to pass through to premiums is construction costs. Premiums have to reflect the Biden effect on material and labor.

Biden is but the latest, and I'd assert the worst, influence on that. But government has been getting the first bite at the annually inflating supply of M2 for decades and decades.

While not perfect, it seems to me that cost comparing things over time relative to the dollar's value against gold is a depressing exercise.

For whatever reason, people still value gold largely as they always have. Walk into a gun show with a pair of $10 gold eagles and see what you can buy, vs walking in with $1500 in greenbacks. The value of something like a 1911A1 relative to a pair of eagles has changed very little since 1920-ish.

 

[Brent in Az]

Trump is preparing 100 executive orders for day 1 in the Whitehouse