[HN Gopher] Florida insurers steered money to investors while cl...
___________________________________________________________________
Florida insurers steered money to investors while claiming losses,
study says
Author : howard941
Score : 154 points
Date : 2025-02-22 13:25 UTC (9 hours ago)
(HTM) web link (www.tampabay.com)
(TXT) w3m dump (www.tampabay.com)
| nine_zeros wrote:
| But of course - I don't understand why people are forgetting that
| when companies raise prices/cut benefits, it is not because of
| actual losses but because they want to return more of their
| revenue to shareholders than to customers or employees.
|
| It is a flawed model that is sucking society dry but this is how
| America is set up. There are only a few ways to beat them - some
| of them involves lawmakers passing laws that protect people over
| investors. Ain't happening with the current elected officials.
| yummypaint wrote:
| It's all predicated on having competition, which of course
| companies hate. Once a company becomes both a monopoly and "too
| big to fail" it isn't really a company anymore, but
| functionally a piece of government run by unelected profiteers.
| If elected officials did their jobs and maintained something
| resembling a free market everything would be so much better.
| nine_zeros wrote:
| > If elected officials did their jobs and maintained
| something resembling a free market everything would be so
| much better.
|
| Not happening for the next 4 years.
|
| Absent government help, people need to take matters in their
| own hands. Build unions and co-ops. Customer unions, patient
| unions, homeowners unions - not just employer unions.
|
| Band together and buy reduced price/better termed insurance.
|
| Ultimately, shareholders must take a few years of losses -
| that's just business.
| redserk wrote:
| I'm confused at the "free market" implication here. What
| resembles the free market has been deciding "Florida isn't
| worth it" and companies have been pulling out in response.
|
| I'll concede in that a few bad regulations have accelerated
| this trend but these regulations, even if repealed, can't
| change the fact that tropical weather is becoming more
| severe.
|
| After all, there are many other states that have a lot lower
| likelihood of town/city-level destruction in a year.
| throwaway5752 wrote:
| "It is a flawed model that is sucking society dry but this is
| how America is set up."
|
| This article is about a problem of how Florida, specifically,
| is set up.
|
| To the downvoter - perhaps you didn't read the article, don't
| know about Florida's P&C regulatory problems, or wanted to make
| another point. But from the article:
|
| _" The Office of Insurance Regulation said in a statement that
| the study was not given to lawmakers because it was "not a
| formal examination report." It was produced months before
| lawmakers met in emergency legislative sessions in 2022 and
| left in a "draft" status."_
|
| Florida knew this, and was surpressing this, because the state
| executive branch is corrupt and in a state of regulatory
| capture.
| acdha wrote:
| Yes, and that's why it's relevant: Florida has a major
| problem which can't be solved by pretending really hard that
| it doesn't exist, and the legislative climate won't allow
| actual fixes. Republicans have ensured that climate change is
| hitting everyone as hard as possible, and blocked corporate
| accountability or regulation, and prevented raising taxes to
| have the government step in, and neither party is willing to
| acknowledge the negative consequences of having home equity
| be the primary retirement fund for most people. There's no
| way to make the current model work and the alternatives are
| blocked.
| throwaway5752 wrote:
| Agreed. It's trivially easy to manipulate suggestible
| people and say "this is why the system doesn't work"
| instead of really understanding something complex.
|
| The system works. It is broken in Florida, but Florida
| broke it and has corruptly and incompetently swept the
| problem under the rug for a couple of decades while luring
| people with unsustainably low taxes and insurance premiums.
| That is beginning to unravel in a way that cannot be
| hidden.
| acdha wrote:
| I don't think we can say the system really works as much
| as it's failing slower in other areas. We keep bumping
| into reminders that the post-WWII era was something of an
| anomaly rather than a steady state. Florida is a front
| runner because it's both unusually highly exposed and
| ideologically captured but I think much of the country
| isn't far behind - just basic things like roads and
| sewers aren't sustainable in many areas without increased
| taxes, and a lot of people do not have much margin for
| that. An awful lot of infrastructure is around its design
| lifetime already and much of that will be getting hit
| with increased climate stress.
| jghn wrote:
| We also tax at a much lower rate than we did in the post-
| WW2 era.
| acdha wrote:
| Yes - there are many areas where we could have the
| government soften blows, except that decades of spending
| by rich people have convinced large swathes of the
| population to believe that's a moral peril.
| quickthrowman wrote:
| > But of course - I don't understand why people are forgetting
| that when companies raise prices/cut benefits, it is not
| because of actual losses but because they want to return more
| of their revenue to shareholders than to customers or
| employees.
|
| When I raise my prices (construction services), it's due to the
| annual wage increase for the union labor I use to perform the
| work. If I arbitrarily raise my price, I will lose a
| competitively bid project to a hungrier competitor.
|
| I understand that not all industries are competitive, but
| that's what regulations should be used for, regulating markets
| with a handful of players. Not all price increases are due to
| greed, the price of everything goes up over time due to
| inflation.
| GenerWork wrote:
| Not surprising in the slightest. Let's hope the legislature
| delivers the recommendation that the office is asking for,
| hopefully this'll help slow the raise in insurance rates and get
| people off of Citizens.
| speff wrote:
| > Regulators asked for that [better metrics] in 2023 but
| lawmakers rejected it, claiming it would "upset the apple cart"
| of Florida's insurance industry.
|
| I don't disagree with the lawmaker's stance on this one. FL's in
| a bad spot where home insurance in particular is unsustainable
| given the increasing threat from climate change. Why would I want
| to run an insurance operation in FL without an actual incentive
| (read: more money)? There ARE going to be multiple city-leveling
| hurricanes in the future - how do people expect to be able to pay
| for this?
| dsr_ wrote:
| You raise the rates on everyone to cover actual expected
| losses, and make sure that the insurance companies don't commit
| fraud.
|
| Then people will say that they can't afford Florida. And they
| will be correct.
| speff wrote:
| Agreed, but it seems like the people of FL want a populist
| who will prevent the companies from raising rates[0][1]. What
| happens then?
|
| It's rhetorical, since we see in this post's article what
| happens. But my point is that something like this was more-
| or-less inevitable.
|
| [1]: https://www.flgov.com/eog/news/press/2025/governor-ron-
| desan...
|
| [2]: https://www.floridapeninsula.com/blog/florida-
| legislation-he...
| toomuchtodo wrote:
| They want the socialism benefits wrapped in populist
| authoritarianism to appease their tribal and in group
| belief system. "The only moral benefits are my benefits."
|
| With Florida climate risk accelerating, the new admin
| telling states FEMA is unnecessary, and ~15-20% of Florida
| homeowners going without property insurance due to cost,
| this will manifest in an unfortunate but entirely expected
| outcome: catastrophic economic loss at some point in the
| future with no recourse for the majority impacted (citizen
| homeowners and GSE investors alike).
| tqi wrote:
| Followed by a federal bailout, presumably
| SaintGhurka wrote:
| >> What happens then?
|
| Same thing that's happening in CA. Insurers pull out of the
| state and non-renew policies.
|
| I'm sure it was satisfying to see the regulator stick it to
| the insurance companies, but you can't force them to write
| policies if they don't think it's worth it.
| WillPostForFood wrote:
| This is literally the opposite of what is happening. They
| are reforming laws to decrease costs, and have had new
| insurers enter the market.
|
| https://www.wptv.com/money/real-estate-news/9-new-
| insurers-f...
| quickthrowman wrote:
| > Agreed, but it seems like the people of FL want a
| populist who will prevent the companies from raising
| rates[0][1]. What happens then?
|
| Eventually, property values would be drastically reduced
| and home insurance would be more per year than the
| mortgage. If it's 80% mortgage 20% insurance premiums now,
| maybe it will flip to something like 35%/65%
| mortgage/insurance with property values halved (or more).
| I'm ignoring the fact that the replacement cost of a home
| has little to do with the property value since most of that
| value is in the land, but the land would also be worth
| less. Regardless, a shitload of mortgages would be
| underwater, impacting both lenders and borrowers on a
| massive scale. Vast amounts of wealth would be destroyed.
|
| Or, property values remain the same and the poor have to
| leave Florida. This assumes there are enough people that
| can move to Florida and pay the same for a property with
| doubled or tripled insurance premiums, which is probably
| less likely than the first scenario I laid out.
| dsr_ wrote:
| It's a little odd to say "vast amounts of wealth would be
| destroyed" without noting that this is the result of
| spending, borrowing and lending irrationally.
|
| It's not so much that the mortgages are underwater. It's
| that the houses are.
| SkiFire13 wrote:
| Wouldn't the insurance being twice the mortgage mean that
| in the time you pay your mortgage the house is expected
| to be destroyed and rebuilt twice?
| Clubber wrote:
| This is accurate at the macro level, but on the micro level the
| insurance companies are doing nasty insurance company stuff
| like doubling rates in ~5 years, requiring people to replace
| their roofs every 10 years instead of every 30 years (at their
| own expense) and low balling claims expecting most people to
| not hire a lawyer to fight for them when their house is in
| shambles. They've really gotten shady over the last few years.
| These aren't fly-by-night insurance companies, these are
| companies you've all heard of that make hundreds of billions of
| dollars a year, companies with blue logos and red logos; how
| American.
|
| The other problem is, as most of you may know, to get a home
| loan to buy a house, you are required by the banks to carry
| insurance. This makes it a near monopoly that these companies
| are taking full advantage of. I'm sure the legislature is happy
| to take campaign contributions from these companies to ensure
| the status quo. No one will get arrested. You know the drill.
|
| I agree insurance will be more expensive in a hurricane prone
| area, but all the shady stuff is what people are complaining
| about.
| jghn wrote:
| As a state, they consistently vote for politicians who are
| anti-regulation and pro-capitalism. What do they expect to
| happen here?
| Clubber wrote:
| I think the last Democrat who ran against DeSantis got
| caught smoking crack in a hotel room with a male hooker.
| Florida doesn't seem to have a lot of great choices. Pick
| the corrupt person, red or blue.
|
| To be fair, a lot of Democratic politicians destroyed their
| economies with extended lockdowns, and also being extremely
| generous with prosecuting theft, among other things, so
| Florida isn't the only one with bad choices.
|
| I'm not defending DeSantis, but it seems the job of US
| politician attracts a certain type of person, regardless of
| what color their flag is. The longer they stay in, the more
| comfortable they get with being, lets say, morally
| flexible.
| acdha wrote:
| Wasn't his last opponent Charlie Crist in 2022? He didn't
| seem to be a bad choice.
| Clubber wrote:
| Yes, you're right. Crist was a Republican governor before
| but he switched to Democrat last cycle. He was decent as
| far as I remember, but I was too young when he was
| governor and wasn't paying much attention. I wanted Crist
| to win last cycle; DeStantis really went off the handle
| starting with his second term. His first term was ok.
| koolba wrote:
| > I think the last Democrat who ran against DeSantis got
| caught smoking crack in a hotel room with a male hooker.
| Florida doesn't seem to have a lot of great choices. Pick
| the corrupt person, red or blue.
|
| The was from DeSantis's first election for governor. The
| Democrat was Andrew Gillum, mayor of Tallahasee:
| https://en.wikipedia.org/wiki/Andrew_Gillum
|
| And it was meth, not crack, with a male hooker. But that
| was after he had already lost the election.
|
| What's crazier is how close that election was. The spread
| was 0.4%. That's ~30K votes out of 8+M.
|
| The 2022 reelection spread with DeSantis arguably at the
| peak of his popularity was 19.4% which is a landslide by
| all measures.
| bilbo0s wrote:
| Well, then it sounds like they got what they wanted. If
| the numbers are to be believed, they got what they
| _really_ wanted.
|
| Which is why the rest of the nation is happy for them!
| They have the government they want and deserve. And I'm
| sure that government will sort out their problems in a
| fashion consistent with that government's beliefs, and
| therefore, also consistent with the desires of the people
| of Florida.
|
| So everyone is getting what they wanted here. Really
| there is no problem.
| ineedaj0b wrote:
| You've heard of Elon talk of 'the woke mind virus'?
| Whether or not it's a thing, there is a concept of
| memetic viruses like computer viruses. There's also 'psy-
| ops', but psy-ops are usually intentional and pushed by
| some group, whereas mind viruses arise unintentionally. A
| few others:
|
| Anti-Vaccine, Flat Earth, Doomscrolling, Productivity
| etc.
|
| Well there's another. It captures people in their late
| 20s and 30s. It's getting political. It's getting far to
| ensconced in politics. You should treat politics like you
| are work at HF and your job is to find base reality
| truth. If not you become well, one of those guys, and
| unless you work in Government - no one wants to hear it.
|
| California (largest state) burning is not good. Florida
| (3rd largest state) having rising house costs is not
| good. Don't get captured by tribalism.
| jghn wrote:
| Let's move past candidates. If we were to take a random
| polling of people in a median area of FL and ask them
| questions like "should we remove regulations on private
| businesses?". I would be flabbergasted if the polls
| showed anything other than overwhelming support for this.
| Likewise, I would imagine the same for a question like
| "Should the federal government provide home owners
| insurance".
|
| And yet, if you were to ask the same people: "if you lost
| everything you owned in a disaster and were left
| penniless, should the government help you out?" I
| guarantee you the answer would be different.
|
| And herein lies the real problem.
| p_j_w wrote:
| > the last Democrat who ran against DeSantis got caught
| smoking crack in a hotel room with a male hooker.
|
| And yet Matt Gaetz got elected there. It seems having a
| flawed personal life isn't a dealbreaker in Florida.
| jhawk28 wrote:
| Gaetz was in the house. He only needed to convince his
| district to vote for him (1/28).
| hollywood_court wrote:
| No one shoots themselves in the foot more often than GOP
| voters.
|
| It's wild to watch folks like my SIL (a teacher) and my BIL
| (a combat veteran with no other marketable skills) vote
| against their own self interests every time they select a
| GOP candidate.
|
| These folks have spent decades doing everything they can to
| make life more difficult for teachers and veterans. Yet
| teachers and veterans will still line up to elect these
| people.
| Clubber wrote:
| See, the problem with two political parties is you get a
| lot of baggage for a couple of things you like. So you're
| basically voting for two piles of shit that may say one
| or two things you like. Did I like lockdowns? No, Do I
| like corrupt insurance, also no.
|
| The way I see it is the Democrats are for the really poor
| people and the really rich people, of which I'm neither.
| The GOP is for the really rich people, of which I am not.
| Neither party has any interesting restoring any type of
| freedoms, they both want to ban stuff they don't like.
|
| The middle class really has no real representation, and
| that's why we're dying.
| bdangubic wrote:
| _they both want to ban stuff they don 't like._
|
| genuinely curious which stuff do democrats want to ban?
| hollywood_court wrote:
| I'm curious to hear the answer as well.
|
| Maybe they'll say something about guns. But we all know
| Republicans basically invented modern gun control.
|
| Democrats want to ban things like unvaxxed children.
| Which sounds like a great idea. Especially looking at the
| current measles outbreak in Texas.
| Arainach wrote:
| In the last 4 years the Democrats expanded overtime
| eligibility, ramped up antitrust enforcement, got
| inflation under control, cracked down on junk fees,
| forgave billions in student loan debt, invested in
| domestic manufacturing, invested in infrastructure
| spending (unlike Trump's "infrastructure week" that was
| talked about for his entire term and never happened),
| prosecuted companies for union busting, added penalties
| for airlines who abuse customers, and so many other
| things.
|
| Anyone who claims "both are the same" and "neither does
| not anything for the middle class" is being willfully
| ignorant.
| Clubber wrote:
| Yea, you're right. Biden did some pretty good things for
| the middle class. I'm glad he got us out of Afghanistan
| finally, though it was pretty messy.
|
| I'm more remembering Clinton's NAFTA and basically
| telling everyone to "learn to code," and Obama bailing
| out the banks but allowing middle class homes to be sold
| for pennies on the dollar to companies like Berkshire. It
| wasn't his mess, but the bailouts seemed one sided.
|
| Biden also did some bad things, like the lockdowns, and
| threatening people's jobs if they didn't get the jab.
| Misrepresenting the efficacy of the vaccine, etc. I
| believe Pfizer made record profits off those policies,
| which was, for lack of a better word, "icky." The Twitter
| Files were pretty bad as well. I didn't like that he
| defended his 93 crime bill, one of our countries biggest
| mistakes. He also punted on legalizing pot, ensuring more
| of the drug war. That's kinda my point, with either
| party, we get a few good things and a lot of bad things.
| It always feels like a bad deal.
| phonon wrote:
| Lockdowns were under Trump. How quickly we forget ...
| ryandrake wrote:
| > These folks have spent decades doing everything they
| can to make life more difficult for teachers and
| veterans. Yet teachers and veterans will still line up to
| elect these people.
|
| I don't know your SIL or BIL, but in general they line up
| to vote because the party promises to make life _even
| more difficult_ for people unlike them. "I may be losing
| my job and health benefits, but on the bright side, some
| immigrant might be sent back to their country, or some
| blue haired lesbian might be driven to suicide!" That's
| the mentality we're dealing with.
| hollywood_court wrote:
| Agreed. They vote like that because they wish to make
| life more difficult for those they dislike.
| consumer451 wrote:
| > FL's in a bad spot where home insurance in particular is
| unsustainable given the increasing threat from climate change.
|
| I was a South FL resident for half of my life. Either the
| insurance pool is spread across the entire country, subsidizing
| FL, or just stop.
|
| FL will soon be uninsurable in the free market.
| bluedino wrote:
| Isn't this what happened in areas of California?
| consumer451 wrote:
| If I understand the situation correctly, yes.
|
| The core of insurance is Lloyd's of London. They do the
| math, aka the re-insurance numbers.
|
| If a retail insurance company can't get re-insurance for a
| local market, then they exit that local market.
|
| That is what happened prior to the LA fires. The math saw
| it coming, re-insurance was pulled.
|
| Both CA and FL are high-risk, and each have state-backed
| insurance systems of last resort. The more that these get
| tapped, the more unsustainable it all becomes.
|
| Climate change, anthropogenic "or otherwise," sucks for
| insurance.
| throwup238 wrote:
| You're missing one key piece of the puzzle: consumer
| insurance rates in California are regulated by the
| California Department of Insurance led by an elected
| Insurance Commissioner. It's the agency responsible for
| regulating rates and how fast insurers can raise them. In
| the last decade, it's been very slow to allow insurers to
| raise those rates to account for the risk they've
| recalculated.
|
| Insurers didn't pull out because the state is
| uninsurable, but because they were being hamstrung.
| Properly priced in fire insurance can be expensive here
| depending on location but it's not like Florida where
| there's predictable water damage to most houses in the
| path of a hurricane every 5-10 years. These past fires
| were the most destructive in history and burned under
| twenty thousand structures in the fifth largest economy
| in the world - it was traumatic but relatively minor in
| the grand scheme of things and well within the state's
| capacity to bail out without federal assistance (unlike
| Florida and the National Flood Insurance program which
| has sucked up tens of billions of federal funds since
| Katrina).
| jhawk28 wrote:
| Only parts are uninsurable. If a house was built after 2005,
| it was done with updated hurricane codes. Most are built up
| higher, have hip roofs, and have their roofs strapped down to
| cinderblock walls with cement filled in the corners. All new
| roofs have a "sealed deck". The uninsurable are going to be
| on the coast (although you can mitigate this in a lot of
| cases) and low areas.
|
| Side note: all insurance claims are subsidization.
| amluto wrote:
| > There ARE going to be multiple city-leveling hurricanes in
| the future - how do people expect to be able to pay for this?
|
| Are there?
|
| As far as I can tell, hurricanes:
|
| - Destroy buildings that are not properly designed and built to
| withstand enough wind. The industry and modern codes know how
| to deal with this for new and sufficiently retrofitted
| construction. I don't even think the measures needed are
| particularly expensive.
|
| - Damage to structures due to wind-blown rain. The more
| informed architects and engineers know how to deal with this. A
| very brief search suggests that even the Miami-Dade code hasn't
| caught up: for example, you can still build a vented roof
| assembly in Florida. This is a poor idea in a humid climate
| even without hurricane, and those vents are problematic in a
| hurricane. Getting rid of them in new or remodeled construction
| is easy and not very expensive, but architects and builders
| need to learn how.
|
| - Damage to structures due to flying things near them. In a
| city setting, this can be mitigated by building structures that
| don't turn into flying junk and enforcing requirements for
| people to keep their yards clean.
|
| - Flooding: this will cause massive damage to whole cities.
|
| An interesting property of the issues other than flooding is
| that the most vulnerable structures may get destroyed by
| hurricanes, leaving behind the less vulnerable structures.
| dsr_ wrote:
| Sounds exactly like fraud.
| wheelerwj wrote:
| Florida Insurers were running a Ponzi scheme, got it.
| toomuchtodo wrote:
| Still are.
|
| https://news.ycombinator.com/item?id=42450680
|
| https://news.ycombinator.com/item?id=41664750
| whimsicalism wrote:
| again, government at fault. it is beyond stupid that GSE
| mortgage backstops even exist in the first place
| emorning3 wrote:
| BUT BUT BUT Floridians voted for DeSantis, so its all good.
|
| So now he's busy protecting insurers from being sued.
|
| So nothing to see here. Just the government that you voted for
| collecting their bribes and protecting their friends.
|
| Floridians are gonna get exactly what they deserve from the new
| administration.
| jffry wrote:
| DeSantis received 4.61 million votes [1] from a population of
| 23.37 million [2]. 3.15 million voters voted for a candidate
| other than DeSantis [1]
|
| [1]
| https://en.wikipedia.org/wiki/Electoral_history_of_Ron_DeSan...
|
| [2] https://en.wikipedia.org/wiki/Florida
| speff wrote:
| 14.5m eligible voters[0] - but your point still stands there.
| Though I'm of the opinion that non-voters implicitly voted
| for whoever won. So 11.35m hypothetical people voted for
| DeSantis in my mind.
|
| [0]: https://dos.fl.gov/elections/data-statistics/voter-
| registrat...
| emorning3 wrote:
| PS: Not voting is voting.
|
| No real American has the right to sit on the sidelines
| anymore.
| bilbo0s wrote:
| And that's how democracy works. If you didn't vote? Well,
| your fault.
|
| The beauty of the election is that it means right now in
| Florida you have exactly the government you want and deserve.
| blacksqr wrote:
| The maxim of the law is "Silence gives consent." Those who
| did not vote voted for the winner.
| s1mplicissimus wrote:
| The logical outcome of shareholder driven economy. Reminds me of
| a youtube quote: "Sell the houses to whom, Ben? Aquaman?"
| wonderwonder wrote:
| What's interesting is the entire thing is a game. I live in
| Florida. Had a roofer come by a couple years ago saying that a
| storm had come through a few months ago and there had been hail.
| So if he goes up on my roof and is able to find proof of hail
| damage I get a new roof for free. I needed a new roof at the time
| so while I generally look poorly on solicitation, I told him go
| ahead. A month later I had a brand new roof that cost me $1,000
| out of pocket instead of $25,000.
|
| These guys must have done 10 roofs within a few streets of my
| house.
|
| So while the 250k is not a lot for an insurance company to eat, I
| am sure when that is multiplied by 1000's over the state, it gets
| expensive.
|
| With that said, I also had a flood (10 inches of standing water)
| during a storm and my flood insurance company denied my claim
| because my sunken living room was considered a basement (2 steps
| down from the main floor). Turned into an indoor pool. So that
| was a nice $50k I had to spend out of pocket. I even paid
| separately for flood insurance as my hoi does not cover flooding.
| So total waste of money on that.
|
| The entire thing is a circle of people scamming each other.
| jbs789 wrote:
| The roof stuff drives up prices massively. The MGA stuff is
| just the tool/response for the insurer to manage the downside
| for things like the roof nonsense - if they can pocket the fee
| when they write the deal then if there's a subsequent rush of
| claims (some roofer, in some area, following some storm, which
| inflates claim costs), then the loss is capped at the equity
| they have in the insurance carrier.
| bashmelek wrote:
| My thoughts exactly. I live in Florida, and have for 30 years.
| I've never personally used my insurance, and my parents had to
| use theirs once when the neighbor's tree randomly fell in our
| yard, and they also had their insurance pay for most of their
| roof-a lot of people do. I paid for my own roof fully out of
| pocket.
|
| If you are near water or below ground then there is a near
| certain risk of flood, and I realize I subsidize those areas
| while I chose to stay away from water. But the entire national
| conversation is focused on saying that climate change has
| doomed Florida
| selimthegrim wrote:
| Well, this probably explains why those Koi pond entranceways
| fell out of fashion after the 80s
| deepsquirrelnet wrote:
| Between tariffs (nails) and a huge number of undocumented
| workers in the roofing industry[1], it's all setup to fall
| apart pretty soon.
|
| [1]
| https://www.roofingcontractor.com/articles/100311-reporting-...
| bluedino wrote:
| Your insurance company blindly cut a check and didn't send an
| adjuster out to see how old your roof was and deny the claim or
| pro-rate it to only pay 10% of the cost?
| idermoth wrote:
| For those of us who live here, it's frustrating. Tons of scams
| and bullshit.
|
| But we can name 10 recent transplants who built new, very large
| homes at water level in the past 5 years (ever wonder why they
| tell you hurricanes are getting more expensive??)
|
| Then these same transplants scream bloody murder if the water
| gets close to their house. It has dominated political
| discussion in areas where, imho, these homes shouldn't even
| exist and other, less wealthy residents are lacking proper
| infrastructure maintenance.
|
| Many of those transplants lost their shit after the recent
| hurricanes, even though anyone who is native knows it's always
| a possibility when you live 25 feet from the water at water
| level.
|
| Then these same transplants want the cities to work impossible
| magic and "fix it." These same city officials, from my
| experience, are almost certainly in the pocket of big real
| estate investors.
|
| Anyway, I get it. It sucks to flood out. But many of of these
| rich transplants clearly do not have the SLIGHTEST idea how the
| physics of water works. They're lucky it recedes so fast in my
| metro too.
| game_the0ry wrote:
| Companies and their executives need to be held accountable of
| this will never stop.
|
| No more bail outs and implement clawbacks.
| emorning3 wrote:
| What the insurers are doing is all legal, what do you propose
| exactly?
|
| Do you think that the current administration is going to 'hold
| executives accountable'?
|
| Trump could literally drive over to your house and shoot you in
| the head for even suggesting such a thing.
| maxerickson wrote:
| I wonder how those rates of return compare to say Georgia and
| Wyoming.
|
| (A state you'd expect to have reasonably similar risk and one
| where you'd not necessarily expect it to be similar)
| bilbo0s wrote:
| Average elevation in Georgia: 600ft
|
| Average elevation in Florida: 100ft
|
| Georgia coastline: 100 mi non-NOAA
|
| Florida coastline: 1350 mi non-NOAA
|
| Even when cheating with non-NOAA numbers, Georgia is nowhere
| near comparable to Florida. Most of the people in your pools in
| Georgia are not on the coasts, and live at non-dangerous
| elevations. Whereas in Florida, nearly all of the people in
| your pools live on the coasts, and at extremely dangerous
| elevations.
| dmoy wrote:
| For anyone else momentarily confused like me:
|
| _risk_ pools (which is evidently a term of art in insurance:
| https://en.m.wikipedia.org/wiki/Risk_pool)
|
| Not swimming pools, which was my first read of above comment,
| at which point I thought, "well obviously I got something
| wrong there, time to look at Wikipedia"
| bilbo0s wrote:
| Sorry.
|
| I should have been more clear.
|
| Yes. Risk pools.
|
| What I was trying to illustrate is that the fundamental
| model of sharing risk can work in a place like Georgia,
| whereas in a place like Florida it doesn't.
| maxerickson wrote:
| Okay, pick whatever state, but the interesting thing is
| looking at the rate the industry is pulling out profits at.
| Are the Florida affiliates 10 times more profitable or 100?
| And so on.
| whimsicalism wrote:
| Sorry but a 4.5% profit cap in a state like Florida is
| ridiculously low. The problems with insurance are usually state-
| caused.
| iask wrote:
| I think the elephant in the room is fraudulent claims. Majority
| of the claims filed is related to over-priced contractors. Pick
| any city, pick any house - old, new, big, small, tiny - the
| average roof replacement is 4x-5x the cost!
|
| I know of multiple cases where the adjusters send in claims that
| are 50% to 90% of the actual repair cost. This is the REAL
| problem. Not hurricanes. It's the fucking fraud.
|
| I think the only option to combat this is to give home owners the
| right to fix things like roof themselves...why do I need a city
| permit, why do I need a fraudulent contractor permitted ONLY by
| the city (I don't want the city looking out for me...that's
| always their BS argument...leave that to me). I should be able to
| shop the supplies myself.
|
| Here's another exercise - pick any city in FL - try to buy
| roofing materials yourself.
|
| The point is - Fraud is the biggest problem with homeowners
| insurance in the state of FL.
| quickthrowman wrote:
| > why do I need a city permit, why do I need a fraudulent
| contractor permitted ONLY by the city (I don't want the city
| looking out for me...that's always their BS argument...leave
| that to me). I should be able to shop the supplies myself.
|
| You are not the only person that will own the house you live
| in, that's essentially what permits and regulations are for, to
| ensure the next owner isn't saddled with a stupid decision made
| by the previous homeowner. Roof inspections are particularly
| important in places with snow load or hurricane force winds.
|
| Roof claims are prorated, if your previous roof was rated for
| 30 years and installed 15 years ago, you get half of the
| replacement cost paid.
|
| If you don't like it you can pay off your house and self-insure
| your residence. If you don't like cities, go buy land and build
| a house in an unincorporated area, there are places that
| completely lack any local building code enforcement.
| iask wrote:
| You are not the only person that will own the house you live
| in, that's essentially what permits and regulations are for,
| to ensure the next owner isn't saddled with a stupid decision
| made by the previous homeowner. Roof inspections are
| particularly important in places with snow load or hurricane
| force winds.
|
| That's what home inspectors are for at the time of purchase.
| And even if I choose to replace the roof myself - the city is
| free to inspect according to their ordinances. What I
| disagree with is that you MUST use their approved
| contractors.
|
| And the prorated nonsense is simply mathematical fraud.
| quickthrowman wrote:
| > What I disagree with is that you MUST use their approved
| contractors.
|
| Who is 'they', the city or the insurer? The state I live in
| does not have approved contractors by jurisdiction, if you
| have a state license and any city specific licensing, you
| can pull a permit in that jurisdiction. Perhaps Florida is
| different.
|
| If the contractors are mandated by the insurer, the fault
| lies with state law. In my state, insurers _must_ use OEM
| replacement parts for car insurance repairs if the customer
| wants them to, this is due to state law. Likewise, my car
| insurer has _recommended_ repair facilities, but state law
| forces them to allow me to choose where I have my car
| repaired under an insurance claim.
|
| It's understandable why the insurer wants only approved
| contractors (helps control costs), but your state could
| force the insurer to allow any contractor to do a repair
| covered by insurance by passing legislation. Insurance
| rules are almost entirely state specific, so blame your
| state government if you're unhappy with the terms of your
| insurance policies.
| SR2Z wrote:
| > The state I live in does not have approved contractors
| by jurisdiction, if you have a state license and any city
| specific licensing
|
| Unless I'm having a stroke, aren't counties/cities
| specific jurisdictions within a state?
|
| Licensing IS a set of approved contractors, and we would
| be lying to each other if we pretended that state
| licensing requirements are always entirely aboveboard.
| Where I live, the city is notorious for being captured by
| local unions and setting (ludicrously high) minimum wages
| for tradesmen to guarantee they remain competitive.
| quickthrowman wrote:
| > Licensing IS a set of approved contractors, and we
| would be lying to each other if we pretended that state
| licensing requirements are always entirely aboveboard.
|
| My employer holds contractor licenses in all 50 states.
| Please be specific about which things are not above board
| with regards to contractor licensing instead of allusion.
|
| > Where I live, the city is notorious for being captured
| by local unions and setting (ludicrously high) minimum
| wages for tradesmen to guarantee they remain competitive.
|
| Nobody is forcing you to live where you do. Major cities
| (sometimes states) do sometimes have rules about
| prevailing wages on publicly funded projects or city
| owned properties but I've never heard of forcing
| prevailing wages on private projects. If you have an
| example, I'd like to see.
|
| Certain trade unions have been better about preventing
| non-union competition than others, pipefitters and sheet
| metal workers in particular, but I'm not aware of a
| jurisdiction that forces the use of union labor. If there
| is, I'd be curious to know what it is. Electricians are
| almost all union labor in Chicago due to the city's
| electrical code requiring conduit and banning romex in
| residential construction.
|
| By the way, I'm a construction project manager and deal
| with these things every single day.
| jfengel wrote:
| That seems impossible. I have been assured that only government
| pays fraudulent claims. The invisible hand ensures that
| corporations will root out fraud.
| loeg wrote:
| Florida significantly reformed insurance/claims in 2023 to
| reduce fraud. Senate bill 2A prevents assigning insurance claim
| benefits to 3rd parties, which was a significant source of
| insurance fraud.
| mlinhares wrote:
| The elephant in the room is that hurricane insurance shouldn't
| be a for profit business because no business can survive
| multiple cities being destroyed by a hurricane, this money
| should have been driven to a state fund that pays out when
| disaster strikes and the private insurance business should
| insure only the usual stuff.
| jghn wrote:
| It's not an elephant in the room. The fact that half of the
| populace is too brainwashed and/or stupid to understand
| truths like this is the elephant in the room.
| whimsicalism wrote:
| democracies generally will not be able to insure at a
| sufficient level. i'm opposed to having the government force
| me to subsidize others poor choice of environ. if someone
| wants to live in a fire-prone or hurricane-prone area, that
| is their choice and they should be exposed to the true cost
| of insuring themselves and hopefully this will cause people
| to move somewhere safer instead or make changes (like a
| sturdier home, clearing brush, etc.) that reduce their rates.
| 1123581321 wrote:
| Public home insurance with unlimited risk appetite would
| create a hazard as too many people would move and build
| carelessly. For public health and financial reasons, the
| state of Florida shouldn't encourage this.
|
| Reinsurance already covers excess claims before an insurer
| exits the market. There is no systemic risk from an insurance
| confidence crisis as there was in banking pre-FDIC.
|
| Any suggestion to compensate with additional burden on
| homeowners ("just charge them more", "require stricter
| building codes") can be handled by existing insurance
| regulation.
| mlinhares wrote:
| Oh yeah, because the "collect hurricane insurance, spend
| all the money, go bankrupt" pipeline has worked wonders in
| Florida.
|
| The government already foots the bill when insurance
| doesn't cover the costs (which is every single time here in
| Florida) and when there is no insurer anymore Citizens
| Insurance (the government plan) also covers it.
|
| Homeowners insurance wasn't made for natural disasters and
| the fact we continue to make it so only fills the purses of
| the fraudsters running the scams. The moment there is no
| more free money for these insurers in Florida the market
| will change overnight.
| cm2187 wrote:
| Not sure I agree with the article.
|
| 1) Making a loss doesn't prevent you from paying a dividend.
| Dividends aren't paid from the current year's profit, but from
| retained earnings, i.e. from accumulated profits since the
| creation of the company. It is frequent for companies to maintain
| their dividend policy through cycles.
|
| 2) The insurer doesn't have to make a loss overall to make a
| claim that the rates charged on some specific part of their
| portfolio do not cover expected losses on that portfolio, since
| circumstances have changed. In theory insurance rates must be
| sufficient to cover expected losses, and I am pretty sure
| financial regulations require insurers to do so (prudential
| rules/solvency, though I do not work for an insurance company so
| not an expert).
|
| So it is one thing to call the insurers claims bullshit, and
| maybe it is. But 1) they paid a dividend or 2) the company did
| not make a loss for the year, aren't valid arguments.
| loeg wrote:
| Worth understanding this whole argument applies only to local
| Florida-only insurers; the big national entities don't operate
| like this _and also found Florida too expensive to operate in_
| prior to the 2023 tort /insurance reforms.
|
| > So executives create sister companies that charge the insurance
| company for basic services, such as claims handling,
| underwriting, accounting and issuing policies. (Large national
| insurers typically handle all of those services internally.)
| cptskippy wrote:
| This practice is pretty common in auto insurance. The company
| you wrote your policy with is usually broker and your ID car
| will list the actual Insurance Company. If you go through an
| independent agent you'll encounter 3 layers of abstraction
| where the agent writes business for multiple brokers who manage
| books of business for different insurance companies.
| serjester wrote:
| For some background, Florida is an incredibly challenging
| insurance market. In 2020, the state accounted for 85% of
| insurance litigation despite making up only about 10% of total
| premiums in the US. That combined with sky rocketing reinsurance
| costs, has driven tons of reputable carriers out of the state.
| They dodged a bullet with Milton - many of the remaining carriers
| are one big hurricane away from insolvency.
| cptskippy wrote:
| ~20 years ago when I worked for an auto insurance broker, we
| opened a program in Florida and it was very challenging. I'm
| trying to remember the specifics but the regulations were such
| that you couldn't collect more than like 15 days of premium in
| the down payment and you were required to cover that policy for
| the first 30 days. So there was always something like a 15 day
| gap. This meant policies were cancelling after the first month
| and rewriting. They didn't have electronic approvals at this
| time so you couldn't implement any sort of real-time checks
| either. If your producer wrote a policy, you were on the hook
| for it. I think we introduced some by-fax validation process to
| mitigate this.
|
| Another common practice for people who need insurance to
| register vehicle but had no intention of carrying insurance was
| to write bad checks. If the person was approved they'd
| basically have 30 days of coverage for free. If they had an
| accident they could pay the premium, if they didn't then they
| could let the policy lapse.
|
| There was also something weird about the uninsured and
| underinsured coverage, I can't remember specifics but I think
| it was that the coverage was required due to the high number of
| people who drove uninsured but we couldn't charge for it? I
| can't recall exactly.
|
| The regulations were such that it made it very hard to make
| money and I think we backed out of the market after 12-18
| months.
| howard941 wrote:
| Uninsured/underinsured is not required in Florida. It's good
| to have because it's the only coverage that actually benefits
| the insured - but it's not required. And it's not cheap.
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