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AAA is limiting coverage in Florida, citing natural disaster threat

thehill.com

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Re: AAA is limiting coverage in Florida, citing natural disaster threat

#31

Post by acdha »

sagarm wrote: post #29
acdha wrote: post #6

Earlier quoted context omitted.

The state of Florida is likely going to end up as the insurer of last resort, which causes some interesting political tensions because it means that a lot of working-class people are going to be subsidizing the well-connected people who are wealthy enough to own the waterfront property which is most at risk from flooding.

That's already happening: https://www.miamiherald.com/news/business/article270752777.h...

Yes - I’m expecting it to get brutal after the next major storm or two. We had family in Miami and before they moved they were looking at some hefty increases just due to the last few rounds of flooding. More frequent, more widespread is really going to reset actuarial models.

Re: AAA is limiting coverage in Florida, citing natural disaster threat

#32

Post by paulddraper »

maweaver wrote: post #21

Everyone thinks of flooding in Florida, but the real risk is wind. When a hurricane hits, a relatively small area is subject to flooding. But huge swaths of the state are hit with high sustained winds. If the winds compromise the roof and rain gets into the house, you're looking at a huge amount of damage to the home. For that reason, insurers are very strict about roof age. Roofs are very expensive to replace ($15-$…

And this might be obvious, but the failure mode is the wind dislodging/damaging a sufficient number of shingles and rainwater soaking/flooding the house.

Very destructive.

Re: AAA is limiting coverage in Florida, citing natural disaster threat

#33

Post by brucethemoose2 »

maweaver wrote: post #21

Everyone thinks of flooding in Florida, but the real risk is wind. When a hurricane hits, a relatively small area is subject to flooding. But huge swaths of the state are hit with high sustained winds. If the winds compromise the roof and rain gets into the house, you're looking at a huge amount of damage to the home. For that reason, insurers are very strict about roof age. Roofs are very expensive to replace ($15-$…

Ian's flooding zone was pretty populated. And it was tracking for a direct hit on Tampa for awhile (except for the Euro model, which was right all along), which would have been quite a flooding disaster.

You are right about the roofing issue though, like said below even a damaged roof can destroy your house. Honestly I forgot about this because flooding was such a thing for some acquaintances.

Re: AAA is limiting coverage in Florida, citing natural disaster threat

#34

Post by throw9away6 »

cco wrote: post #30

I've read that a decent driver here has been home insurance lawsuits. Florida accounts for 79% of all home insurance lawsuits, my eyes bulged when I read that. https://news.fiu.edu/2022/the-big-reason-florida-insurance-c...

Yes it’s not just a hazard problem but also a Set of rules that encourage fraud and waste

Re: AAA is limiting coverage in Florida, citing natural disaster threat

#35

Post by kadoban »

civilitty wrote: post #11
rdtsc wrote: post #4

I guess people might flock to Florida because it's warm there and it doesn't have an income tax? I can see out of state buyers get what looks like a house they can afford, only to find out they are on the hook for a huge insurance bill every month. If insurance companies exit from an area, what happens to mortgages then in that area? Banks like to protect their mortgage properties and force people to buy insurance, e…

Florida is a battleground state so the Federal government will step in at the taxpayers' expense as usual: https://en.wikipedia.org/wiki/National_Flood_Insurance_Progr...

Florida is not a battleground state. Maybe a couple of decades back it looked like one.

Re: AAA is limiting coverage in Florida, citing natural disaster threat

#37

Post by howard941 »

maweaver wrote: post #21

Everyone thinks of flooding in Florida, but the real risk is wind. When a hurricane hits, a relatively small area is subject to flooding. But huge swaths of the state are hit with high sustained winds. If the winds compromise the roof and rain gets into the house, you're looking at a huge amount of damage to the home. For that reason, insurers are very strict about roof age. Roofs are very expensive to replace ($15-$…

> In Florida you can assign your benefits to them and they gain the ability to sue on your behalf.

Not anymore. The legislature took this away at their last special session. They also took away attorneys fees when an insured sues and wins against his insurer.

Re: AAA is limiting coverage in Florida, citing natural disaster threat

#38

Post by Spooky23 »

JimtheCoder wrote: post #15
WarOnPrivacy wrote: post #14

Earlier quoted context omitted.

> Doesn't this boost GDP and keep people employed? Build a big house, weather knocks it down, build a bigger house, weather knocks it down... No because the people who most need the wages can't afford to live where the work is.

But if the mansions are getting built, which they appear to be, the workers must be getting there somehow...

In Hilton Head, SC, the hotel housekeeping and security workers mostly get bussed in from 2 hours or more away.

Florida is similar. It gets pretty poor and gritty within 30 minutes of most fancy places.

Re: AAA is limiting coverage in Florida, citing natural disaster threat

#39

Post by Spooky23 »

rs999gti wrote: post #16
thenerdhead wrote: post #8

In other words, it goes to show that if you don’t have competition in a place where claims will absolutely be filed, you will go broke. Smart move, but makes me feel insurance owes more to humanity than leaving people to fend for themselves.

You mean more insurance companies? There isn't competition because insurers' odds against hurricanes and floods are bad. They can't collect enough premium before a payout occurs, so there will not be insurers that will take the FL home insurance bets without higher premiums.

Insurance companies can price that risk.

The problem is of the “fuck around and find out” variety. Florida is creating a lot of new, hard to price risks. Risk managers hate unknown probability, high impact events.

How many oceanfront high rises built of reinforced concrete are potential at risk of catastrophic failure due to poor regulatory environment?

How will climate change and various environmental risks in Florida impact risk?

On the car side, how many uninsured accidents will take place due to the crackdown on undocumented or under documented drivers?

On the liability side, what kind of crazy torts will result from the weird crackdowns on teachers and doctors?

Re: AAA is limiting coverage in Florida, citing natural disaster threat

#40

Post by thenerdhead »

mint2 wrote: post #17
thenerdhead wrote: post #8

In other words, it goes to show that if you don’t have competition in a place where claims will absolutely be filed, you will go broke. Smart move, but makes me feel insurance owes more to humanity than leaving people to fend for themselves.

“In a place where claims will absolutely be filed” Insurance isn’t supposed to work like that - there isn’t a way these houses can be covered at a reasonable rate without forcing other customers to subsidize them.

Rates are much higher in tornado alley. So that argument is pretty hard to use.
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