Florida residents How do you afford insurance?

[M-technik-3]

Every other storm it seems insurance companies stop covering residents and paying claims yet they raise everyone elses rates nationwide to cover their costs.

At what point is Florida uninhabitable? I feel bad for folks that can't just pick up and move.

[erickonphoenix]

Good question, we moved my mom off the Texas Gulf Coast largely due to homeowners insurance increases. Wind, flood and fire were three different policies and the totals were nearing her mortgage payments.

[kscarrol]

Go ask folks in CA about earthquake or fire coverage. State Farm is threatening to leave CA altogether, it’s not just a Florida issue.

[IanH]

"We can't profit off you anymore so get bent, we out" - the cartel

[RickFLM4]

We don’t pay state income taxes, so that helps. I pay about $6K/year for insurance with 2% deductible and expect I’d pay more than that in state income tax if we had one.

Also, our property value assessment increases are capped for primary residences. I pay about $6K for property taxes in our home we’ve been in since 2002 and that is well under 1% of property fair value.

[rebekahb]

Ask this question again once their renewals come up. In LA, we had Laura, Delta, Zeta & Ida. All within about a year. Prior to this my homeowners was around $3200 and flood around $900. In 2022, my insurance was around $5500/year. UPC went bankrupt at the end of the year which was after all the other companies had pulled out. Result, force placed with Citizens at around $9k/year. Was able to maneuver to get it around $7500/year. This is NOT including flood which is around $1200 or property taxes. A few companies came in and we are back down to around $5400.

Currently, people are trying to buy homes and the note they can afford. Once insurance gets factored in people are walking away from the deals.

The next issue, is getting insurers to pay. We know people who are fighting insurance and don’t have complete repairs from Ida 8/2021. Attorneys have had to get involved and don’t even get me started on that. We will never file a claim again unless we have significant damage. It isn’t worth it and they nail your ass on the back end.

[2000cs]

There’s an old saying: Insurance companies are in the business of getting paid for risks they don’t take.

Details in insurance contracts matter, a lot.

[David70]

Originally Posted by M-technik-3

Every other storm it seems insurance companies stop covering residents and paying claims yet they raise everyone elses rates nationwide to cover their costs.

At what point is Florida uninhabitable? I feel bad for folks that can't just pick up and move.

I don't believe they are able to have everyone nationwide pay for the FL problems otherwise the companies not in FL (many have moved out) would be significantly cheaper. Companies raise rates when they can, people pay for increases when they don't have a better option.

For those not saying its only a FL problem and point out CA, there are huge areas of the country that don't have anything close to what the worst states deal with.

With the FEMA budget (Federal program) at $20 billion and likely to get huge extra funding, states that continue to use the bulk of it should be paying the bulk of it. If states regularly need federal money people outside the state should have a say in what is going on. I'm fine with you building a house on the beach but don't want to fund replacement it if it continues to get knocked down.

[DrVenture]

All these disasters may be taking their toll. Florida having no state tax and lower property taxes certainly does offset some of the extraordinary expenses. But you have to add back property insurance, flood insurance, auto insurance, pest control, much higher food costs, being 38th in the U.S. for wages, etc.

We sold the MIL's house in Punta Gorda in mid 2023. The current price on Zillow is down 10% from that sales price, which was 10% down from the 2022 peak price.

From a newsletter that I read: "Milton and Helene are compounding another problem: People aren’t migrating to Florida like they used to. With Tampa’s housing supply up 58% and demand down 10% in August, half of the area’s for-sale listings had gotten price cuts as of a month ago, according to the analytics firm Parcl Labs.

Zoom in: One homeowner told the Wall Street Journal he’s been trying to sell his ~$580,000 suburban Tampa house for eight months, but he hasn’t even received open house visitors.

Zoom out: Prospective buyers are getting priced out. Home and flood insurance rates in Florida have skyrocketed as much as 400% over the past five years, and those premiums will likely only get worse after this year’s hurricane season. Disaster models are projecting an average of $35 billion in damages from Hurricane Milton"

There is an also expense to having to leave your home frequently, toss your food, travel/lodging, and clean up, an $8K hurricane deductible, paying to have shutters installed. I am not dunking on Florida, but I do think that all factors need to be considered in a true cost analysis. And I think it is beginning to hurt certain locales.

CA, TX and FL have the highest insurance claims nationwide. It does seem unsustainable.

[RickFLM4]

Originally Posted by rebekahb

Ask this question again once their renewals come up. In LA, we had Laura, Delta, Zeta & Ida. All within about a year. Prior to this my homeowners was around $3200 and flood around $900. In 2022, my insurance was around $5500/year. UPC went bankrupt at the end of the year which was after all the other companies had pulled out. Result, force placed with Citizens at around $9k/year. Was able to maneuver to get it around $7500/year. This is NOT including flood which is around $1200 or property taxes. A few companies came in and we are back down to around $5400.

Currently, people are trying to buy homes and the note they can afford. Once insurance gets factored in people are walking away from the deals.

The next issue, is getting insurers to pay. We know people who are fighting insurance and don’t have complete repairs from Ida 8/2021. Attorneys have had to get involved and don’t even get me started on that. We will never file a claim again unless we have significant damage. It isn’t worth it and they nail your ass on the back end.

Insurance issues are nothing new here. They have been going on since the mid-1990's after Hurricane Andrew. Insurance rates go up a lot after hurricanes. They never go down in a year with no storm. We went about 10 years with no hurricanes where I live and rates went up every year, then they went up a lot after Irma in 2017.

Originally Posted by David70

I don't believe they are able to have everyone nationwide pay for the FL problems otherwise the companies not in FL (many have moved out) would be significantly cheaper. Companies raise rates when they can, people pay for increases when they don't have a better option.

For those not saying its only a FL problem and point out CA, there are huge areas of the country that don't have anything close to what the worst states deal with.

With the FEMA budget (Federal program) at $20 billion and likely to get huge extra funding, states that continue to use the bulk of it should be paying the bulk of it. If states regularly need federal money people outside the state should have a say in what is going on. I'm fine with you building a house on the beach but don't want to fund replacement it if it continues to get knocked down.

With respect to your last sentence, I conceptually agree and think that it applies to all government programs, as well as insurance. Those with the greatest risk should pay more. I don't want to pay high insurance rates for the risk to my house in my state and also pay for disasters incurred by uninsured/underinsured in my state and elsewhere. But that's the way it works out right now. I have never received any money from FEMA for disasters in FL or anywhere else but surely paid some of the funds being distributed. I think people living in areas prone to disasters, especially on the coast or otherwise in flood zones, need to purchase homeowners insurance and flood insurance and flood insurance coverage needs to be better than it is and priced accordingly. FEMA money should be for exceptional losses for insured people and losses in places where they are truly not anticipated (e.g., floods in places where FEMA said there is no need for flood insurance). It should not be a replacement for insurance.

There is an issue with property insurance in FL with respect to risk. The state of FL is very large and risk is not the same everywhere. The risk of significant hurricane damage or flooding where I live is low relative to other parts of the state, but those risks increase exponentially as you get close to the coast. The insurance rates are higher near the coast (and generally need to be obtained through Citizens as insurer of last resort), but IMO they do not adequately reflect the exponential risk of loss from living on the coast where property values are also much higher. Additionally, we (in FL) are all on the hook for an assessment if Citizens needs more money to pay claims. So we are effectively reinsuring the risk of losses to houses on the coast.

As I stated above, I am ok with what I pay. It will go up next year. It isn't going to be fixed by just complaining about it. There needs to be some reform to reduce fraudulent claims and more fairly distribute the cost of risk. I suspect the same is true in other places and it is spreading as insurers will use any reason to raise rates wherever they can.

[IanH]

If anyone cares to learn about the FL insurance crisis (and by extension our national insurance crisis), this video is quite informative. It's not just "going up like normal" and the way this year is shaping up so far the industry could implode in short order.

Need not criticize the political lean of the source, its a pretty matter of fact piece.

[David70]

Originally Posted by RickFLM4

Insurance issues are nothing new here. They have been going on since the mid-1990's after Hurricane Andrew. Insurance rates go up a lot after hurricanes. They never go down in a year with no storm. We went about 10 years with no hurricanes where I live and rates went up every year, then they went up a lot after Irma in 2017.



With respect to your last sentence, I conceptually agree and think that it applies to all government programs, as well as insurance. Those with the greatest risk should pay more. I don't want to pay high insurance rates for the risk to my house in my state and also pay for disasters incurred by uninsured/underinsured in my state and elsewhere. But that's the way it works out right now. I have never received any money from FEMA for disasters in FL or anywhere else but surely paid some of the funds being distributed. I think people living in areas prone to disasters, especially on the coast or otherwise in flood zones, need to purchase homeowners insurance and flood insurance and flood insurance coverage needs to be better than it is and priced accordingly. FEMA money should be for exceptional losses for insured people and losses in places where they are truly not anticipated (e.g., floods in places where FEMA said there is no need for flood insurance). It should not be a replacement for insurance.

There is an issue with property insurance in FL with respect to risk. The state of FL is very large and risk is not the same everywhere. The risk of significant hurricane damage or flooding where I live is low relative to other parts of the state, but those risks increase exponentially as you get close to the coast. The insurance rates are higher near the coast (and generally need to be obtained through Citizens as insurer of last resort), but IMO they do not adequately reflect the exponential risk of loss from living on the coast where property values are also much higher. Additionally, we (in FL) are all on the hook for an assessment if Citizens needs more money to pay claims. So we are effectively reinsuring the risk of losses to houses on the coast.

As I stated above, I am ok with what I pay. It will go up next year. It isn't going to be fixed by just complaining about it. There needs to be some reform to reduce fraudulent claims and more fairly distribute the cost of risk. I suspect the same is true in other places and it is spreading as insurers will use any reason to raise rates wherever they can.

I agree with almost everything you said but with the part in bold, I think it is completely expected that hurricanes hitting FL & causing widespread damage are going to happen with regularity & state of FL should be doing more to be ready to take on the disaster & cost as it happens. Nobody is shocked when a massive hurricane hits FL. As to who in FL should pay I am ok with whatever plan Floridians come up with. All of FL doesn't have the same risk but as a whole the state of FL has a massive risk compared to most areas of the country.

Maybe if a huge amount government aid is going to an area & residents had to pay they would think twice about living there. FL is one of the fastest growing states in the country (known for low taxes) & disasters are only going to involve more people. It's Florida's choice to load the coasts with people & buildings, as long as I am not paying for it I am fine with it.

I agree on eliminating insurance fraud, problem with this is people are completely against it until they think they can take advantage of their situation.

As for "fairly distributing the cost of risk", doesn't the State of FL set rates, then companies either comply or leave? Companies leave, less competition, government sets up Citizens to help pay so in affect you end up with government insurance? I don't see this system ever creating fair rates & if a person doesn't have to bear the actual cost of insurance they don't care nearly as much. Florida's insurance system seems to be the opposite fair distribution of costs and very socialist.

Florida has lost some form of home coverage from over 30 insurance providers in the past few years.

Since 2017, over 10 property and casualty companies that offered homeowners insurance in Florida have liquidated. Five of those companies liquidated in 2022 alone. Other insurance companies are voluntarily leaving the state. Even more are choosing to nonrenew swaths of home insurance policies, drastically tighten policy eligibility requirements or request substantial rate increases.

https://www.bankrate.com/insurance/h...urance-crisis/

[RickFLM4]

Originally Posted by David70

I agree with almost everything you said but with the part in bold, I think it is completely expected that hurricanes hitting FL & causing widespread damage are going to happen with regularity & state of FL should be doing more to be ready to take on the disaster & cost as it happens. Nobody is shocked when a massive hurricane hits FL. As to who in FL should pay I am ok with whatever plan Floridians come up with. All of FL doesn't have the same risk but as a whole the state of FL has a massive risk compared to most areas of the country.

Maybe if a huge amount government aid is going to an area & residents had to pay they would think twice about living there. FL is one of the fastest growing states in the country (known for low taxes) & disasters are only going to involve more people. It's Florida's choice to load the coasts with people & buildings, as long as I am not paying for it I am fine with it.

I agree on eliminating insurance fraud, problem with this is people are completely against it until they think they can take advantage of their situation.

As for "fairly distributing the cost of risk", doesn't the State of FL set rates, then companies either comply or leave? Companies leave, less competition, government sets up Citizens to help pay so in affect you end up with government insurance? I don't see this system ever creating fair rates & if a person doesn't have to bear the actual cost of insurance they don't care nearly as much. Florida's insurance system seems to be the opposite fair distribution of costs and very socialist.





https://www.bankrate.com/insurance/h...urance-crisis/

I don't think we disagree on the first part other than potentially treating FL differently than anywhere else with risks (which I do not agree with). My view is that Floridians and everyone else need to buy their own insurance and only get money from FEMA when something really exceptional happens. For example, as I said, if FEMA's flood map says someone shouldn't need flood insurance, and they get flooded, well then I can see a basis for some relief. If you live somewhere that FEMA's flood map indicates there is a risk of flood, well then it's up to you to get flood insurance. IMO, everyone in FL should have homeowner's insurance for hurricane risk unless they wish to forego any help in recovery. Same for other parts of the country with their own natural disaster risks. The end result should be that there won't be a huge amount of aid repeatedly going to any specific area if everyone is adequately insured. But I wouldn't exclude areas entirely from aid - just require people have insurance as a first line of defense.

Citizens' premiums are effectively controlled by the state legislature and most are actually too low IMO. Other insurers set their rates and the state must approve them, like (I believe) everywhere else. The current system is the product of "something must be done" and while true something needs to be done to make insurance available, premiums should reflect the risk to the insured and thus is concurrently both part of the solution and part of the problem. Fraud remains a huge problem and I've had contractors bold enough to call me or knock on my door and tell me they can get me a free roof. But as someone (maybe a dummy) who has adequate insurance, pays their premiums, paid just under $50K for my own roof, paid for my own impact-resistant glass and lives inland, I don't want to subsidize anyone with more money in a multi-million dollar property on the coast in FL or anywhere else, any more than you want to fund people in other states. So this is in addition to the FEMA funding issue in my book.

[David70]

Originally Posted by RickFLM4

I don't think we disagree on the first part other than potentially treating FL differently than anywhere else with risks (which I do not agree with). My view is that Floridians and everyone else need to buy their own insurance and only get money from FEMA when something really exceptional happens. For example, as I said, if FEMA's flood map says someone shouldn't need flood insurance, and they get flooded, well then I can see a basis for some relief. If you live somewhere that FEMA's flood map indicates there is a risk of flood, well then it's up to you to get flood insurance. IMO, everyone in FL should have homeowner's insurance for hurricane risk unless they wish to forego any help in recovery. Same for other parts of the country with their own natural disaster risks. The end result should be that there won't be a huge amount of aid repeatedly going to any specific area if everyone is adequately insured. But I wouldn't exclude areas entirely from aid - just require people have insurance as a first line of defense.

Citizens' premiums are effectively controlled by the state legislature and most are actually too low IMO. Other insurers set their rates and the state must approve them, like (I believe) everywhere else. The current system is the product of "something must be done" and while true something needs to be done to make insurance available, premiums should reflect the risk to the insured and thus is concurrently both part of the solution and part of the problem. Fraud remains a huge problem and I've had contractors bold enough to call me or knock on my door and tell me they can get me a free roof. But as someone (maybe a dummy) who has adequate insurance, pays their premiums, paid just under $50K for my own roof, paid for my own impact-resistant glass and lives inland, I don't want to subsidize anyone with more money in a multi-million dollar property on the coast in FL or anywhere else, any more than you want to fund people in other states. So this is in addition to the FEMA funding issue in my book.

I don't believe Ohio has this and I think fraud, state being involved with rates and your much higher risk are your problems. Get government out of setting rates, companies would come back, at a higher price overall (some higher, likely some lower), some would think twice about where they live based on the rates.

What is the Ohio Department of Insurance’s role in determining insurance rating plans?
The Department does not set insurance rates, nor do we tell an insurance company it must revise its rating plan unless the rating plan does not comply with Ohio insurance laws.

What is an insurance rating plan?
Insurance is a product that relies on the spreading of risk among diverse individuals or groups in order to operate. All insurance companies use data and statistics to predict levels of risk for various individuals or groups. When the Department analyzes risk calculations and rating plans, we determine whether or not the calculations and plans are “actuarially sound”, i.e. reasonable in light of the anticipated risks and calculated based on the correct formulas or actuarial standards.

https://insurance.ohio.gov/wps/wcm/c...ially%20sound.

[RickFLM4]

Originally Posted by David70

I don't believe Ohio has this and I think fraud, state being involved with rates and your much higher risk are your problems. Get government out of setting rates, companies would come back, at a higher price overall (some higher, likely some lower), some would think twice about where they live based on the rates.





https://insurance.ohio.gov/wps/wcm/c...ially%20sound.

The state of FL sets Citizens' rates because it is a state entity, created to fill the void of insurance companies that don't want to write policies in some areas. There is no one else to set its rates so the state will always set the rates for Citizens, somewhat like FEMA setting federal flood insurance rates.

As for other insurers, FL does not set the rates for them. It exercises regulatory oversight / approval to ensure compliance with actuarial standards and statutory provisions, similar to other states like Ohio.

[dreamingat30fps]

Originally Posted by RickFLM4

We don’t pay state income taxes, so that helps. I pay about $6K/year for insurance with 2% deductible and expect I’d pay more than that in state income tax if we had one.

Also, our property value assessment increases are capped for primary residences. I pay about $6K for property taxes in our home we’ve been in since 2002 and that is well under 1% of property fair value.

This. If I had to pay state income tax it would be a LOT more than insurance. Also we don’t pay property tax on vehicles. I realized what a crock that was when we bought the property in NC. I registered my F350 and miata there because that’s where I keep them. It’s over $300/year for the F350 and around $300 or high $200s for the miata. My friend in CA with a brand new C8 I think pays like $1k for his registration. In FL its like $72/year no matter what it is as far as I can tell.

Also if your home is paid off you could take the chance and not have insurance, or at least not the hurricane portion which is the most expensive. I know some people who do this. Just have regular insurance for like liability, fire etc and a flood policy. I was without insurance for a while when they tried to change mine from around $3500 to over $7k. I did finally find some for around $4k and that’s what I’ve had up to now.

[David70]

Originally Posted by RickFLM4

The state of FL sets Citizens' rates because it is a state entity, created to fill the void of insurance companies that don't want to write policies in some areas. There is no one else to set its rates so the state will always set the rates for Citizens, somewhat like FEMA setting federal flood insurance rates.

As for other insurers, FL does not set the rates for them. It exercises regulatory oversight / approval to ensure compliance with actuarial standards and statutory provisions, similar to other states like Ohio.

Above you said "Other insurers set their rates and the state must approve them..." - I thought this meant the state had to approve the rate.

Seems like the "don't want to write policies in some areas" is at least partly caused by the rate increases capped and at 1.2 million homes with citizens (roughly 15% in FL) I would expect at some higher rate the 1.2 million would go down.

In many areas of the state, Citizens’ premiums remain well below private-market company premiums. That’s because, unlike private insurance companies, Citizens' rate increases are capped by law.

Since 2010, those capped rates have not kept pace with increases in the private market. In areas like Miami-Dade County, Citizens’ rates would need to increase by 82% to reach competitive levels with private carriers.

As for the "we don't pay state income tax", only way to compare the cost of living between two places is to compare everything. Income tax, sales tax, toll roads, housing costs, pay, where in FL, the list goes on and on.

[mjr24]

It’s become apparent that insurance is mostly a fucking racket…..with 99 percent of people paying premiums for losses they will never experience.

So yeah, I don’t feel sorry for insurance companies.