Florida Insurance Industry in Flux

[UNF2007]

We have had vacation property in costal Florida for several years. The dwelling is insured by USAA, but the policy specifically excludes wind and flood. I have a separate policy for wind from Citizens. My two experiences with citizens have been awful, a few years ago one of the storms came through and did some damage to my roof, ripping off fascia and shingles. Citizen's came out and did an assessment, after about 3 months of waiting ended up denying my claim because their models(not actually measured) said the wind speed wasn't sufficient to cause the damage on the day the claim was filed. Then sent me a letter saying my policy would be canceled unless I could prove the roof had been repaired to their satisfaction, in a timeline they determined. I had another separate event where wind blew the flashing off my chimney during a thunderstorm and water leaked into the home and caused damage to the walls. Same story claims adjustor came out and 3 months later said it was a defect with the manufacturing of the chimney, and their model didn't show wind speeds needed for that damage. Letter in the mail saying all damage needed to be repaired or policy is canceled. 

 

My opinion is that Citizen's is insurance in name only, to allow for mortgage underwriting to continue. But they have no intention of paying claims, outside of maybe a major named storm direct hit, fortunately haven't had to experience that yet. Unfortunately the only recourse is to sue them, but then they have the right to cancel the policy, so outside a catastrophic event it doesn't make sense to pull that lever. 

 

 

 

 

[gfp]

Thanks for the color on Citizens.  Nothing like waiting 3 months to hear back when your roof is already partially gone.  I guess USAA won't write the wind coverage for you?  We have USAA coverage for all of our properties, wind, named storms, etc - everything but Flood which is FEMA.  USAA has been wonderful when you need to file a claim.  The mutual membership model makes the whole experience much less adversarial.  Hell, a former tenant once sued us for a sprained wrist on a slip-and-fall during a rainstorm (documented on security camera footage) and USAA actually lowered our premium because they said they didn't know we had cameras before.

 

I never served in the Military, but I've had USAA coverage since I was 15 because my Father had been in the Air Force.  Not sure we could have purchased our home in New Orleans right after Katrina (when people were scared, prices were very low, and insurance was hard to come by) if it wasn't for USAA.

[fareastwarriors]

Ultra Rich Pay $620,000 to Shield Mega Mansions From Disaster Risk  - Insurance premiums are soaring as climate risk grows, pricing everyone but the wealthy out of some coastal areas.    

 

 

 

Edited September 8, 2023 by fareastwarriors

[fareastwarriors]

Home Insurance Is So High in This Florida Town, Residents Are Leaving In West Palm Beach’s Flamingo Park neighborhood, some homeowners are dropping insurance, and others who can’t are selling

[Dinar]

Unless I misheard, on today's ELS earnings call, CEO said in response to a question that a very large proportion if not most of their Florida customers do not have insurance.  

[Gregmal]

That’s capitalism at work. Prices too high, people don’t buy. If you’ve got a home built pre 2000, and especially pre Andrew, why would you even bother with insurance? Just save and plan on rebuilding new and up to code.

[thepupil]

as an interesting data point, my parents church had an annual budget shortfall of $100K as donations did not come in as expected. 

 

they dropped their windstorm coverage ($100K of $120K / yr total insurance premium) in order to meet the budget and plan to forego coverage indefinitely. 

 

I'm sure there's a relevant bible verse to share here, but I guess I didn't pay enough attention growing up...

 

 

Edited February 13 by thepupil

[dwy000]

5 minutes ago, thepupil said:

as an interesting data point, my parents church had an annual budget shortfall of $100K as donations did not come in as expected. 

 

they dropped their windstorm coverage ($100K of $120K / yr total insurance premium) in order to meet the budget and plan to forego coverage indefinitely. 

 

I'm sure there's a relevant bible verse to share here, but I guess I didn't pay enough attention growing up...

 

 

That must be why it's referred to as an Act From God. 

[Spekulatius]

The demographic trends show already a slowdown in migration to Florida. It will be interesting how the insurance angle is going to play out. I think the Florida backed Hurricane insurance capacity (which is pretty much a credit draw backed by Florida) is pretty much depleted after this season (I think).

 

So my guess is that Florida will have to issue more bonds and raise insurance rates. If you have a home that gets flooded or destroyed by a Hurricane every 30 years or so statistically, it should probably cost 3% of the homes value to insure it, give or take. For a $500k home, that’s $15k a year. This alone can pretty much negate any state income tax advantage you may get from moving to Florida for an average family. Then you have the hassle to get through the inevitable scares every couple of years, the disruption and cleanup and power outages. That doesn’t seem like such a great deal any more.

[73 Reds]

35 minutes ago, Spekulatius said:

The demographic trends show already a slowdown in migration to Florida. It will be interesting how the insurance angle is going to play out. I think the Florida backed Hurricane insurance capacity (which is pretty much a credit draw backed by Florida) is pretty much depleted after this season (I think).

 

So my guess is that Florida will have to issue more bonds and raise insurance rates. If you have a home that gets flooded or destroyed by a Hurricane every 30 years or so statistically, it should probably cost 3% of the homes value to insure it, give or take. For a $500k home, that’s $15k a year. This alone can pretty much negate any state income tax advantage you may get from moving to Florida for an average family. Then you have the hassle to get through the inevitable scares every couple of years, the disruption and cleanup and power outages. That doesn’t seem like such a great deal any more.

Precisely.  You don't need to wait for any data points.  Just talk to the locals and observe.

[Gregmal]

2 hours ago, 73 Reds said:

Precisely.  You don't need to wait for any data points.  Just talk to the locals and observe.

Why would you deliberately ignore data? Even if you talk to disgruntled locals, if they’re leaving, someone is buying their property. This just seems like a very flawed way to go about analysis. 
 

The talking points about “decelerating” growth is misleading as well considering we are coming out of the turbo charged Covid growth period. Of course it wouldn’t continue at that rate forever or the entire US would be in Florida or Texas within a decade. It will just revert to a more normalized number, which is still super positive for the growth prospects. 
 

It’s like people and media sources can’t speak objectively about this stuff for some reason. They’ve been screaming about storms forever, no impact. They’ve been screaming about insurance for the past half decade, still growing. Just seem like a lotta haters out there. It’s crazy here around the NYC area how people act. Almost like they’re threatened by it for some weird reason. 

[73 Reds]

15 minutes ago, Gregmal said:

Why would you deliberately ignore data? Even if you talk to disgruntled locals, if they’re leaving, someone is buying their property. This just seems like a very flawed way to go about analysis. 
 

The talking points about “decelerating” growth is misleading as well considering we are coming out of the turbo charged Covid growth period. Of course it wouldn’t continue at that rate forever or the entire US would be in Florida or Texas within a decade. It will just revert to a more normalized number, which is still super positive for the growth prospects. 
 

It’s like people and media sources can’t speak objectively about this stuff for some reason. They’ve been screaming about storms forever, no impact. They’ve been screaming about insurance for the past half decade, still growing. Just seem like a lotta haters out there. It’s crazy here around the NYC area how people act. Almost like they’re threatened by it for some weird reason. 

LOL, no one is ignoring data.  But by the time you process the data, it will have been all too obvious.  Talk to any realtor, title company, developer, and property owner - they already know.  Not here trying to convince anyone of anything - just telling it like it is.

[Gregmal]

15 minutes ago, 73 Reds said:

LOL, no one is ignoring data.  But by the time you process the data, it will have been all too obvious.  Talk to any realtor, title company, developer, and property owner - they already know.  Not here trying to convince anyone of anything - just telling it like it is.

In what way? What are you forecasting? Are you saying we see 5-10% net population losses annually? By when? If it’s happening now can we at least establish some goalposts? It should be evident next year no? Because all these predictions and sensationalist forecasts have been going on forever. 
 

This kinda reminds me of the whole “rate hike/cut” guessing game here from a year or two ago. There was so much by the way of “obvious” forecasts and writing in the wall. Yet the majority of it never actually occurred. The wagers on these outcomes were largely busts, and the only correct move was to fade the noise. 

[james22]

 

[DooDiligence]

 

Just sayin'

[Spekulatius]

10 minutes ago, DooDiligence said:

 

Just sayin'

That’s a winter in low tax NH. Other than that, the state is great. 

Edited October 13 by Spekulatius

[DooDiligence]

13 minutes ago, Spekulatius said:

That’s a winter in low tax NH. Other than that, the state is great. 

 

Sorry bro. I'll never live above highway 90.

[Gregmal]

I don’t think I’ll ever live full time permanently in one place ever again. The Northeast is amazing from May-September but it’s pretty disgusting after that. It’s disturbing the amount of taxes our local governments steal from us. Most of south Florida I find disgusting after a week or two regardless. Too hot, everything is fake, flat, and meh. North Florida over to the Carolina’s and up to Tennessee is pretty ideal for the winter months.

[UK]

5 hours ago, DooDiligence said:

 

Just sayin'

[73 Reds]

18 hours ago, Gregmal said:

In what way? What are you forecasting? Are you saying we see 5-10% net population losses annually? By when? If it’s happening now can we at least establish some goalposts? It should be evident next year no? Because all these predictions and sensationalist forecasts have been going on forever. 
 

This kinda reminds me of the whole “rate hike/cut” guessing game here from a year or two ago. There was so much by the way of “obvious” forecasts and writing in the wall. Yet the majority of it never actually occurred. The wagers on these outcomes were largely busts, and the only correct move was to fade the noise. 

No forecasts or guessing at all.  When you deal with these real estate professionals every day there is no need to wait for "experts" to tell you what they already see and know.  When folks have lived and worked in communities for decades and even generations, trends become pretty obvious.  That's why in nearly every small and mid sized community there are always your local "Billy-Bobs" who aren't necessarily book smart but they own the most successful businesses and largest homes.  They don't need to wait for data reports to understand local trends.   Not sure what the fixation is on "sensationalism" or what it has to do with this discussion.  

[thepupil]

18 hours ago, 73 Reds said:

LOL, no one is ignoring data.  But by the time you process the data, it will have been all too obvious.  Talk to any realtor, title company, developer, and property owner - they already know.  Not here trying to convince anyone of anything - just telling it like it is.

 

my family all lives inf south Florida, know lots of realtors / homeowners etc. I've not heard a peep about decreasing demand. some other family on west coast got hit pretty hard by irma, including one in property management / RE who had to repair a bunch of stuff across 50+ properties. rebuilt and back to record rental rates/values.

 

interesting disconnect between your anecdata and mine. 

 

the data is quite clear regarding net migration of people and even more clear regarding migration of income / assets. 

 

are you saying you expect this to reverse based on what people in your circle are saying? 

 

what is clear is that old condo's are facing huge assessments / pockets of distress because they're old and need a lot of capital investment, but not clear to me how that clouds/changes the overall story. 

 

[73 Reds]

59 minutes ago, thepupil said:

 

my family all lives inf south Florida, know lots of realtors / homeowners etc. I've not heard a peep about decreasing demand. some other family on west coast got hit pretty hard by irma, including one in property management / RE who had to repair a bunch of stuff across 50+ properties. rebuilt and back to record rental rates/values.

 

interesting disconnect between your anecdata and mine. 

 

the data is quite clear regarding net migration of people and even more clear regarding migration of income / assets. 

 

are you saying you expect this to reverse based on what people in your circle are saying? 

 

what is clear is that old condo's are facing huge assessments / pockets of distress because they're old and need a lot of capital investment, but not clear to me how that clouds/changes the overall story. 

 

That's just the point - trends are all local.  Florida is a large State.  South Florida, particularly along the coast is already built up - there is no more vacant land.  Other coastal regions are not.  Trends in each place differ, often by wide margins.  

[Gregmal]

1 hour ago, 73 Reds said:

No forecasts or guessing at all.  When you deal with these real estate professionals every day there is no need to wait for "experts" to tell you what they already see and know.  When folks have lived and worked in communities for decades and even generations, trends become pretty obvious.  That's why in nearly every small and mid sized community there are always your local "Billy-Bobs" who aren't necessarily book smart but they own the most successful businesses and largest homes.  They don't need to wait for data reports to understand local trends.   Not sure what the fixation is on "sensationalism" or what it has to do with this discussion.  

I think @thepupil did a better job pinpointing the gist of what I was trying to ask you. But its simple. You are heavy with the implication that things are dire and claim this is already occurring, so all Im asking you is to actually establish some goalposts. Because for a very long time, not just you, but people having been stating these things while the exact opposite continues to occur. 

[73 Reds]

11 minutes ago, Gregmal said:

I think @thepupil did a better job pinpointing the gist of what I was trying to ask you. But its simple. You are heavy with the implication that things are dire and claim this is already occurring, so all Im asking you is to actually establish some goalposts. Because for a very long time, not just you, but people having been stating these things while the exact opposite continues to occur. 

Not at all.  There is a large difference between areas that are already developed and those that aren't. Then look no further than demographics.  In South Florida the coasts are all developed and at night when you look up at a 30-story beachfront condo most months other than December, 90% of the units are dark since no one is even occupying those residences.  Foreign ownership dominates and the local economy works in, shall we say funny ways (I'll leave it at that).  The distinction between South Florida and Central Florida and/or North Florida is often as wide as the difference between Brazil and Indiana.    

[thepupil]

31 minutes ago, 73 Reds said:

Not at all.  There is a large difference between areas that are already developed and those that aren't. Then look no further than demographics.  In South Florida the coasts are all developed and at night when you look up at a 30-story beachfront condo most months other than December, 90% of the units are dark since no one is even occupying those residences.  Foreign ownership dominates and the local economy works in, shall we say funny ways (I'll leave it at that).  The distinction between South Florida and Central Florida and/or North Florida is often as wide as the difference between Brazil and Indiana.    

sorry  if I'm not following; on which region/s of florida do you have a positive/negative view?