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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.
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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.
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Florida has lost some form of home coverage from over 30 insurance providers in the past few years.
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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.
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https://www.bankrate.com/insurance/h...urance-crisis/