Capitalism meets climate change
Flood insurance in Florida was always going to be a disaster waiting to happen. It’s happening.
During the insurance claims process, it’s standard for field adjusters, who are trained to assess damaged homes, to collaborate with those back in the office to make minor edits, discuss aspects of the claim and alter line items if, for example, the carrier has evidence that damage was from a prior event, according to adjusters and insurance industry experts. That is how the system is supposed to work.
But that’s not what has been happening in the aftermath of Hurricane Ian, Lee and others said.
Insurers are motivated to find every way they can to reduce the payout, but they’re not supposed to just erase most of what the adjuster reports.
Instead, Lee and other adjusters contracted by regional insurance carriers say that managers have been changing their work by lowering totals, rewriting descriptions of damage and deleting accompanying photos without their approval. These actions to devalue damage are the latest example of the insurance crisis in Florida.
See, you don’t want to be a flood insurance company in Florida. Global warming is going to swamp Florida, and the process is already well under way.
After years of more frequent and intense storms, national carriers have pulled back from the market and smaller, regional carriers with smaller financial reserves jumped in.
Why? Are they stupid? Why would anyone Jump In on that?
In the wake of Hurricane Ian, those companies have been aggressively seeking to limit payouts to policyholders by altering the work of licensed adjusters, according to a Washington Post investigation. As a result, homeowners are left footing much of the bill for repairs, exposing an untenable gap between the cost of storm damage and what insurers are willing to pay to fix it.
Those companies shouldn’t have jumped in in the first place. What did they think was going to happen? Did they not figure out why the big insurers were getting out of Florida altogether?
It’s a sad sad story.
People along the coast in Florida will keep rebuilding as long at they keep getting bailed out because of course another Cat 5 hurricane couldn’t happen again, right? As it is, the sea level rise that’s already baked in will make it impossible to maintain development on Florida’s barrier islands along the coast with higher high tides causing flooding on a regular basis.
Those homeowners should take Ben Schapiro’s advice and just sell their houses and move.
A fairly strong parallel to what happened to homeowners insurance in the wake of the California wildfires. I know several people who’s insurance tripled, if they could find it at all. Some of the companies just pulled out of the state rather than be subject to California’s regulatory bureaucracy.
The motto of short-sighted capitalists everywhere: income now > outlay later. Get the cash then figure out a solution.
But insurance rates going up is different from existing insurance being refused via changing what the adjusters report.
Insurance rates should go up, really. The sooner people are priced out of living in places like Florida and Arizona the better. Of course that just moves the problem down the road a tiny little bit.
The smaller, undercapitalized carriers are jumping in because they can just go bankrupt instead of paying out.
The real reason DeSantis wants to take his semi-fascism national…
I think that this will lead to some class-action lawsuits for fraudulent handling of claims, which will also lead to raised rates.
@me,#2 – that sounds good, but who’s going to buy the property if they can’t get it insured?
There is some joke, perhaps a real story, about an investor who has his broker buy some cheap stock. His purchase pushes the going price up, so he tells the broker to buy more. This also increases the price. After a few more iterations, the investor figures he should realize his gains, so he tells the broker to sell all the shares. The broker asks, “Who to?”
That said, I do think that there might be people willing to buy the property (mostly land) if the sellers are willing to take huge losses. The buyers could tear down the structures and build marinas or something.
@ Me #2 — I see what you did there. In 2020, Ben Shapiro moved his family from Los Angeles to southern Florida. And now, on his show, he says Florida is great.
So in one line, you satirized Shapiro moving to Florida, and the assumption (maybe not his assumption) that everyone can move anywhere they like.
@ Sackbut #9 — The plot of Superman (1978) seems related. Lex Luthor bought worthless desert property in California so he could make it waterfront property by splitting the San Andreas Fault with a nuclear missile (assuming land west of the fault would fall into the ocean).