Florida property tax and home insurance

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Help me understand why someone living anywhere else should care about Florida's property taxes and insurance? My property taxes go up on average 10% every single year and that's not a national issue. Why are Floridians so special?

These posters hate DeSantis.

Yes they hate tax and pocket conservatism.

They hate DeSantis and mock his appearance.

If you’re going to put trans lives and drag queens lives at risk, don’t put on the shiny white go go boots.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It’s not just a Florida issue:
https://www.sfchronicle.com/california-wildfires/article/insurance-state-farm-18125433.php

Insurance risk hasn’t really changed much in the past year in Florida or California. Insurance companies always say they are reducing their insurance exposure because of lawsuits or construction costs or some other nonsense they blame on the states but I worked on this issue as a Congressional staffer and they dropped more policies after the 2008 financial crisis than they did after Katrina.
The profits of an insurance company come more from its investments than from its insurance underwriting. Insurance is a mechanism to create a huge float of reserves that they seek to invest in high-return investment schemes, which often are boom and bust markets like commercial real estate, mortgage backed securities, etc.
When their investments are earning high returns they are willing to expand their insurance business in riskier areas to collect much more premiums to invest. When their investments are losing money they cut their insurance exposure to reduce the amount of capital they are required to hold for paying claims.

I'm going to agree that this is likely due to State Farm getting caught wrong-way on interest rate risk. They probably have a ton of agency securities with 2-3% coupons that had their fair values wrecked by the increase in rates.

Vast majority of California homes have no exposure to wildfire risk. The only people exposed are rich folks up in the grassland hills or rural areas where 2nd homes are concentrated. Vast majority of people live in concrete sprawl of LA, San Diego, or the Bay Area with pretty much no wildfire risk at all. State Farm could easily tailor its availability and charge the appropriate premia to any homes adjacent to woodlands or grasslands that are fire prone. No one living in Riverside, Long Beach, Santa Monica, or Daly City is at risk of a wildfire. And those four cities right there probably cover 350,000 dwelling structures.

State Farm ain't telling the whole story.

Reinsurance rates matter more than anything else and those are still going up. Unless those rates stabilize, nothing else really matters.

Does California have a law that requires any insurer to sell to anyone in the state, regardless of location?

Think of an insurer like a bank: the premium payments are akin to deposits and then they invest in yield-generating assets. The magic of maturity transformation and all that. If State Farm has a sh#t-ton of 10Y agency securities with average coupons of 3%, they are getting absolutely wrecked if there's a major disaster event (akin to a run on deposits). They will have to take large losses on their securities as they realize a fair value that is 20-30% below par value.

From a strategy standpoint, it may be easier for the company to say "No new policies in California" than put in the money and man-hours to tailor the availability of their home owners insurance offerings. Still, State Farm is huuuuuuuuuuge in California. My family bought from them for decades. With know 3 different families with State Farm brokerage offices in California, with the 3rd generation now employed. This is going to be a major loss for brokers and owners.

[Anonymous]

Anonymous wrote:

Anonymous wrote:It’s because of climate change.

Climate change will batter Florida. It does not care about insurance or reinsurance or deductibles or any of it. Just science. Storms are more powerful, more frequent, with significantly more storm surge and rain. Get used to it

The damages have not increased over several decades.

[Anonymous]

Anonymous wrote:After the active hurricane period of the mid-2000s, many Florida homeowner’s insurance companies switched to a reinsurance-heavy strategy.

This was bad timing because Florida went the next decade without any major hurricane strikes. During this period, the insurance companies would have been able to save lots of money, but they missed out due to switching to a reinsurance-heavy strategy.

After a quiet decade, the last few years have seen numerous major hurricane strikes. The insurance companies are completely reliant on reinsurance because they didn’t save money during the good years.

Over the past couple of years, rating companies have been downgrading numerous Florida insurance companies so they can no longer qualify for reinsurance, putting them out of business.

Millions of Floridians have been receiving notices that their insurance is being canceled right before the beginning of hurricane season. And there is no replacement, other than Citizens.

This isn't just the rich people who live on barrier islands. My 1000 square foot concrete block house, with a new roof, located 30 miles inland, lost its coverage and was uninsurable anywhere but Citizens.

The reinsurance companies have been hyping global warming so they can charge higher rates.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It’s because of climate change.

Climate change will batter Florida. It does not care about insurance or reinsurance or deductibles or any of it. Just science. Storms are more powerful, more frequent, with significantly more storm surge and rain. Get used to it

The damages have not increased over several decades.

Go buy some waterfront property in Florida. It will be so fantastic for you and your family. Enjoy!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It’s because of climate change.

Climate change will batter Florida. It does not care about insurance or reinsurance or deductibles or any of it. Just science. Storms are more powerful, more frequent, with significantly more storm surge and rain. Get used to it

The damages have not increased over several decades.

Actual they have. Also climate change is exponential.

[Anonymous]

Anonymous wrote:

Anonymous wrote:After the active hurricane period of the mid-2000s, many Florida homeowner’s insurance companies switched to a reinsurance-heavy strategy.

This was bad timing because Florida went the next decade without any major hurricane strikes. During this period, the insurance companies would have been able to save lots of money, but they missed out due to switching to a reinsurance-heavy strategy.

After a quiet decade, the last few years have seen numerous major hurricane strikes. The insurance companies are completely reliant on reinsurance because they didn’t save money during the good years.

Over the past couple of years, rating companies have been downgrading numerous Florida insurance companies so they can no longer qualify for reinsurance, putting them out of business.

Millions of Floridians have been receiving notices that their insurance is being canceled right before the beginning of hurricane season. And there is no replacement, other than Citizens.

This isn't just the rich people who live on barrier islands. My 1000 square foot concrete block house, with a new roof, located 30 miles inland, lost its coverage and was uninsurable anywhere but Citizens.

The reinsurance companies have been hyping global warming so they can charge higher rates.

That's not how a market works. Also the big national insurance companies, who do not depend on reinsurance, have largely fled Florida.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It’s not just a Florida issue:
https://www.sfchronicle.com/california-wildfires/article/insurance-state-farm-18125433.php

Insurance risk hasn’t really changed much in the past year in Florida or California. Insurance companies always say they are reducing their insurance exposure because of lawsuits or construction costs or some other nonsense they blame on the states but I worked on this issue as a Congressional staffer and they dropped more policies after the 2008 financial crisis than they did after Katrina.
The profits of an insurance company come more from its investments than from its insurance underwriting. Insurance is a mechanism to create a huge float of reserves that they seek to invest in high-return investment schemes, which often are boom and bust markets like commercial real estate, mortgage backed securities, etc.
When their investments are earning high returns they are willing to expand their insurance business in riskier areas to collect much more premiums to invest. When their investments are losing money they cut their insurance exposure to reduce the amount of capital they are required to hold for paying claims.

I'm going to agree that this is likely due to State Farm getting caught wrong-way on interest rate risk. They probably have a ton of agency securities with 2-3% coupons that had their fair values wrecked by the increase in rates.

Vast majority of California homes have no exposure to wildfire risk. The only people exposed are rich folks up in the grassland hills or rural areas where 2nd homes are concentrated. Vast majority of people live in concrete sprawl of LA, San Diego, or the Bay Area with pretty much no wildfire risk at all. State Farm could easily tailor its availability and charge the appropriate premia to any homes adjacent to woodlands or grasslands that are fire prone. No one living in Riverside, Long Beach, Santa Monica, or Daly City is at risk of a wildfire. And those four cities right there probably cover 350,000 dwelling structures.

State Farm ain't telling the whole story.

Reinsurance rates matter more than anything else and those are still going up. Unless those rates stabilize, nothing else really matters.

Reinsurance rates matter in states where most policies are written by small, geographically restricted insurance companies. This is not the typical state insurance market.

[Anonymous]

Florida has been a failed insurance market since Andrew in 1992. Florida Citizens Property Insurance, the state’s last-resort for property owners turned down by private insurers, has 1,272,815 policies in effect at the end of April 2023 and $501 Billion in total insurance in place. While the exposure is spread around the whole state because Florida has hurricane risk everywhere, Citizens has $200 Billion in exposure concentrated in Dade, Broward, and Palm Beach counties. The number of Citizens policies peaked at 1.5 million in 2011 but then dropped to 419,000 by 2019 as private insurers came back. Since 2020, the number of policies dumped into Citizens has tripled, as private insurers fled. For the past 20 years, the bipartisan Florida proposal to address this issue is for the federal government to become the reinsurer for Citizens for a catastrophic hurricane, so that Citizens would not need to purchase private reinsurance for an extreme event.

https://www.citizensfla.com/policies-in-force?p_p_id=com_liferay_asset_categories_navigation_web_portlet_AssetCategoriesNavigationPortlet_INSTANCE_sog4FFgMitJD&p_p_lifecycle=0&p_p_state=normal&p_p_mode=view&p_r_p_resetCur=true&p_r_p_categoryId=

[Anonymous]

Anonymous wrote:Florida has been a failed insurance market since Andrew in 1992. Florida Citizens Property Insurance, the state’s last-resort for property owners turned down by private insurers, has 1,272,815 policies in effect at the end of April 2023 and $501 Billion in total insurance in place. While the exposure is spread around the whole state because Florida has hurricane risk everywhere, Citizens has $200 Billion in exposure concentrated in Dade, Broward, and Palm Beach counties. The number of Citizens policies peaked at 1.5 million in 2011 but then dropped to 419,000 by 2019 as private insurers came back. Since 2020, the number of policies dumped into Citizens has tripled, as private insurers fled. For the past 20 years, the bipartisan Florida proposal to address this issue is for the federal government to become the reinsurer for Citizens for a catastrophic hurricane, so that Citizens would not need to purchase private reinsurance for an extreme event.

https://www.citizensfla.com/policies-in-force?p_p_id=com_liferay_asset_categories_navigation_web_portlet_AssetCategoriesNavigationPortlet_INSTANCE_sog4FFgMitJD&p_p_lifecycle=0&p_p_state=normal&p_p_mode=view&p_r_p_resetCur=true&p_r_p_categoryId=

The federal government should absolutely NOT become the reinsurer to Florida for hurricanes. The federal flood insurance program is already way under-capitalized.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Florida has been a failed insurance market since Andrew in 1992. Florida Citizens Property Insurance, the state’s last-resort for property owners turned down by private insurers, has 1,272,815 policies in effect at the end of April 2023 and $501 Billion in total insurance in place. While the exposure is spread around the whole state because Florida has hurricane risk everywhere, Citizens has $200 Billion in exposure concentrated in Dade, Broward, and Palm Beach counties. The number of Citizens policies peaked at 1.5 million in 2011 but then dropped to 419,000 by 2019 as private insurers came back. Since 2020, the number of policies dumped into Citizens has tripled, as private insurers fled. For the past 20 years, the bipartisan Florida proposal to address this issue is for the federal government to become the reinsurer for Citizens for a catastrophic hurricane, so that Citizens would not need to purchase private reinsurance for an extreme event.

https://www.citizensfla.com/policies-in-force?p_p_id=com_liferay_asset_categories_navigation_web_portlet_AssetCategoriesNavigationPortlet_INSTANCE_sog4FFgMitJD&p_p_lifecycle=0&p_p_state=normal&p_p_mode=view&p_r_p_resetCur=true&p_r_p_categoryId=

The federal government should absolutely NOT become the reinsurer to Florida for hurricanes. The federal flood insurance program is already way under-capitalized.

It's America's retirement home. We'll bail them out because of nanna.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Florida has been a failed insurance market since Andrew in 1992. Florida Citizens Property Insurance, the state’s last-resort for property owners turned down by private insurers, has 1,272,815 policies in effect at the end of April 2023 and $501 Billion in total insurance in place. While the exposure is spread around the whole state because Florida has hurricane risk everywhere, Citizens has $200 Billion in exposure concentrated in Dade, Broward, and Palm Beach counties. The number of Citizens policies peaked at 1.5 million in 2011 but then dropped to 419,000 by 2019 as private insurers came back. Since 2020, the number of policies dumped into Citizens has tripled, as private insurers fled. For the past 20 years, the bipartisan Florida proposal to address this issue is for the federal government to become the reinsurer for Citizens for a catastrophic hurricane, so that Citizens would not need to purchase private reinsurance for an extreme event.

https://www.citizensfla.com/policies-in-force?p_p_id=com_liferay_asset_categories_navigation_web_portlet_AssetCategoriesNavigationPortlet_INSTANCE_sog4FFgMitJD&p_p_lifecycle=0&p_p_state=normal&p_p_mode=view&p_r_p_resetCur=true&p_r_p_categoryId=

The federal government should absolutely NOT become the reinsurer to Florida for hurricanes. The federal flood insurance program is already way under-capitalized.

It's America's retirement home. We'll bail them out because of nanna.

Nana can move back to Minnesota or Long Island.

[Anonymous]

Great read:

RON DESANTIS AND THE FLORIDA HOME INSURANCE UPRISING

https://johndizard.substack.com/p/ron-desantis-and-the-florida-home?r=5agz8&utm_campaign=post&utm_medium=email

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Florida has been a failed insurance market since Andrew in 1992. Florida Citizens Property Insurance, the state’s last-resort for property owners turned down by private insurers, has 1,272,815 policies in effect at the end of April 2023 and $501 Billion in total insurance in place. While the exposure is spread around the whole state because Florida has hurricane risk everywhere, Citizens has $200 Billion in exposure concentrated in Dade, Broward, and Palm Beach counties. The number of Citizens policies peaked at 1.5 million in 2011 but then dropped to 419,000 by 2019 as private insurers came back. Since 2020, the number of policies dumped into Citizens has tripled, as private insurers fled. For the past 20 years, the bipartisan Florida proposal to address this issue is for the federal government to become the reinsurer for Citizens for a catastrophic hurricane, so that Citizens would not need to purchase private reinsurance for an extreme event.

https://www.citizensfla.com/policies-in-force?p_p_id=com_liferay_asset_categories_navigation_web_portlet_AssetCategoriesNavigationPortlet_INSTANCE_sog4FFgMitJD&p_p_lifecycle=0&p_p_state=normal&p_p_mode=view&p_r_p_resetCur=true&p_r_p_categoryId=

The federal government should absolutely NOT become the reinsurer to Florida for hurricanes. The federal flood insurance program is already way under-capitalized.

It's America's retirement home. We'll bail them out because of nanna.

Nana can move back to Minnesota or Long Island.

💯

Peepaw and meemaw that move south deserve it hard and good - cut them off

[Anonymous]

Anonymous wrote:

Anonymous wrote:It’s not just a Florida issue:
https://www.sfchronicle.com/california-wildfires/article/insurance-state-farm-18125433.php

Insurance risk hasn’t really changed much in the past year in Florida or California. Insurance companies always say they are reducing their insurance exposure because of lawsuits or construction costs or some other nonsense they blame on the states but I worked on this issue as a Congressional staffer and they dropped more policies after the 2008 financial crisis than they did after Katrina.
The profits of an insurance company come more from its investments than from its insurance underwriting. Insurance is a mechanism to create a huge float of reserves that they seek to invest in high-return investment schemes, which often are boom and bust markets like commercial real estate, mortgage backed securities, etc.
When their investments are earning high returns they are willing to expand their insurance business in riskier areas to collect much more premiums to invest. When their investments are losing money they cut their insurance exposure to reduce the amount of capital they are required to hold for paying claims.

Verisk and other companies that do robust and detailed spatiotemporal analyses of the data to assess risk for major insurance companies would seriously disagree with your notion that insurance risk isn't changing and worsening for Florida.