Least surprising news ever

The most predictable crisis ever:

Households in Florida, the third most populous state in the US, have been grappling for some time with a property insurance crisis that is making home ownership unaffordable for many.

Now why might that be? Because Florida is doomed. It’s like trying to get fire insurance on your house when it bursts into flames. It’s like trying to buy car insurance after you rear-end another car. It’s like trying to buy life insurance when you’re dead.

After at least six insurers went insolvent in Florida last year, Farmers on Tuesday became the latest to pull out of the Florida market, saying in a statement that the decision was based on risk exposure in the hurricane-prone state.

Because Florida is doomed.

“Hurricane insurance is critical to being able to continue to live in Vero Beach,” Brown, in his 60s, says. “In 2004 and 2005 we were hit twice, at a time when we were fortunately covered by Citizens.”

Since then, however, Citizens’ eligibility rules for property insurance have changed: homeowners are now only eligible for their policies if available premiums from private insurance companies are more than 20% higher than the premiums for comparable coverage from Citizens.

Citizens did not return requests for comment.

“Citizens fired us, and we had to take insurance with a private company – for 20% more,” Brown says.” That company then increased prices by 40% and then last September, in the middle of the hurricane season, went bankrupt and we lost all coverage. I panicked and called every insurance broker I knew. They all said getting cover was impossible now.”

Because Florida is doomed.

The insurance industry relies on low risk. Millions of people get fire insurance, and most of them never need it. If the risk of fire or floods or crashes is too high then it ceases to make sense to sell insurance.

Although demand for properties in Vero Beach has been rising dramatically since the pandemic, people who have been unable to secure insurance for their properties, Brown says, are now fearing this will reduce the value of their homes.

“The houses on either side of me have been on sale for six months. I guess not many people can afford to pay $10,000 a year or more on insurance, and hurricanes are becoming stronger and more frequent here.”

Because Florida is doomed.

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