Hurricane Ian - the Aftermath

[RP]

I've been to Sanibel Island and loved it there. Buying a home there was part of the plan for my lottery winnings. Fortunately I didn't win. If insurance companies go bankrupt as a result of Ian, where does that leave homeowners whose homes were destroyed....https://www.aol.com/finance/insurers...182213253.html

[Daniel Grenier]

Insurance companies going bankrupt over this is as likely as Sanibel getting back to “normal” tomorrow afternoon. But anyway, quite right about Sanibel being a beautiful place. My wife and I spent a couple of months in Cape Coral over 2 winters of few years back and we’d find ourselves driving that now destroyed causeway to Sanibel every second day. What a sad sight to see this gem now. I fear it will never be the same for years to come, sorry to say.

[Dirk Hofman]

Terrible what we're seeing from Florida now, I really feel for the people struggling through this. I don't suppose low lying islands are a good place to buy property anymore.

[fumei]

Originally Posted by Dirk Hofman

Terrible what we're seeing from Florida now, I really feel for the people struggling through this. I don't suppose low lying islands are a good place to buy property anymore.

Uh....no, it is not. The reality is that we (as people) are going to have to face reality and all those properties on flood plains should NOT be rebuilt.

[RP]

Originally Posted by fumei

...The reality is that we (as people) are going to have to face reality and all those properties on flood plains should NOT be rebuilt.

But they probably will be rebuilt. Sandbridge is a barrier island (well peninsula actually) that's part of Virginia Beach. I drove down the coastal road several weeks ago, and couldn't believe all the new and newish homes along the oceanfront. As soon as they're destroyed either by storms or normal erosion (8'-10' per year), someone rebuilds these 5-8 bedrooms vacation rentals. Same thing for North Carolina's Outer Banks...

[Tnfiddler]

My wife’s Aunt owned an ocean view, first floor condo on Ft. Myers beach and we were told that they’re all destroyed. Buildings are still there, but the first floor was completely flooded. We’re heartbroken!! We went to the condo often and LOVED Ft. Myers Beach. We were just there last year and had such a great vacation. My wife always went to a shop In Times Square and the concrete slab is all that’s left of it. This was the view from the condo entranceway and I mean it when I say Ft Myers Beach was amazing!!

[Nymuso]

We used to live on the Outer Banks of NC mainly to fulfill my wife’s lifelong dream of living near the ocean. And we did for nine years until the realities of having Jim Cantore as a frequent visitor set in. We now live by a lake where life is a lot more relaxed and the air conditioners don’t rust out every few years.

[godfreydaniel]

Originally Posted by Daniel Grenier

Insurance companies going bankrupt over this is as likely as Sanibel getting back to “normal” tomorrow afternoon. But anyway, quite right about Sanibel being a beautiful place. My wife and I spent a couple of months in Cape Coral over 2 winters of few years back and we’d find ourselves driving that now destroyed causeway to Sanibel every second day. What a sad sight to see this gem now. I fear it will never be the same for years to come, sorry to say.

https://www.cbsnews.com/miami/news/s...red-insolvent/

And that is from 9/26.

[Mak2525]

Originally Posted by fumei

Uh....no, it is not. The reality is that we (as people) are going to have to face reality and all those properties on flood plains should NOT be rebuilt.

For the record - about 3/4 of the entire state of Florida sits on flood plains - NOT just the coast! The entire state is barely above sea level! Yes, the beach front houses are in the most danger, but the reality is, there are people flooded out by this storm 100 miles inland due to the vast waterway systems (rivers) and a plethora of lakes and retention ponds. Plus, the underground water table and network of springs are just below the surface! There is a reason we don't have basements here in Florida! When a storm of this magnitude hits, especially during our rainy season when the ground is already saturated, the water literally has nowhere to go!

[MrDB]

If you are insured by one of the top 25-30 insurers the chance of insolvency is tiny. Smaller regional/local companies are always more risky as they don't have good results from other areas in the country to balance out losses in other areas.

[Mak2525]

Originally Posted by Daniel Grenier

Insurance companies going bankrupt over this is as likely as Sanibel getting back to “normal” tomorrow afternoon.

How I wish that was the case!

Unfortunately, Florida is WAY underinsured due to many of the big companies protecting their massive profits by not writing Homeowner's policies in the state. The majority of policies are underwritten by several small insurance companies (4 of which have become insolvent over the past year). Several companies have also been downgraded due to potential capital shortfalls, which has them on the brink of insolvency as well. Citizen's Insurance is the "company of last resort" for those who can't find insurance elsewhere (they now hold 15% of all policies) and because they are a state run non-profit, they can charge "emergency assessments" to all policy holders in the state (not just Citizen clients)! The insurance commissioner in Florida has let this situation pretty much become untenable by not requiring the big companies to write Homeowner's insurance, while they make record profits on auto policies off the terrible drivers in Florida.

With never having a claim, my Homeowners yearly premium has gone from $1500 five years ago to $4200 this year ($900 of this is a yearly hurricane assessment that allegedly goes into a hurricane disaster fund)! By the way, this does not cover flooding! My flood premium is another $5000!

[Mr. Jelly]

The markets being down impacts insurance companies. Rebuilding will impact new housing costs also. Along with remodeling costs. Whatever you do don't buy any used cars anywhere near these impacted areas. I'm sure there are other aspects I'm missing.

[buddyhu]

Originally Posted by Mak2525

How I wish that was the case!

Unfortunately, Florida is WAY underinsured due to many of the big companies protecting their massive profits by not writing Homeowner's policies in the state. The majority of policies are underwritten by several small insurance companies (4 of which have become insolvent over the past year). Several companies have also been downgraded due to potential capital shortfalls, which has them on the brink of insolvency as well. Citizen's Insurance is the "company of last resort" for those who can't find insurance elsewhere (they now hold 15% of all policies) and because they are a state run non-profit, they can charge "emergency assessments" to all policy holders in the state (not just Citizen clients)! The insurance commissioner in Florida has let this situation pretty much become untenable by not requiring the big companies to write Homeowner's insurance , while they make record profits on auto policies off the terrible drivers in Florida.

With never having a claim, my Homeowners yearly premium has gone from $1500 five years ago to $4200 this year ($900 of this is a yearly hurricane assessment that allegedly goes into a hurricane disaster fund)! By the way, this does not cover flooding! My flood premium is another $5000!

While I agree that the current situation for almost any kind of insurance is a mess, requiring insurance companies to issue insurance to high risk customers doesn’t strike me as a good solution. The mess might be because of the profit motive, or it might be for other reasons….I don’t know enough about the insurance industry and the pressures they face to reach a firm conclusion. But many folks don't want a big government that is regulating the conduct of business, nor do they want a government bureaucracy. So that kind of leaves us with the current messy situation.

And no matter what type of organization might be offering insurance to high risk customers (such as those in a flood plain), the premiums must be high in order to have funds to pay for large losses that, statistically speaking, will most assuredly happen at some point. Insurance is intended to redistribute risk for the benefit/protection of all who have insurance. But knowingly taking on a lot of high risk customers tends to create an unfair burden on the rest of the insureds. Insurance works best when it is addressing risks that are not quite as predictable as homes a flood plain eventually being destroyed by a flood…especially if the flood plain is also in a location that sees a good number of hurricanes.

Part of insurance necessarily involves risk management, which can sometimes be done via education (Stop smoking, get more exercise, etc). But sometimes it comes down to other, less palatable actions.

[ewalling]

Originally Posted by buddyhu

While I agree that the current situation for almost any kind of insurance is a mess, requiring insurance companies to issue insurance to high risk customers doesn’t strike me as a good solution. The mess might be because of the profit motive, or it might be for other reasons….I don’t know enough about the insurance industry and the pressures they face to reach a firm conclusion. But many folks don't want a big government that is regulating the conduct of business, nor do they want a government bureaucracy. So that kind of leaves us with the current messy situation.

Perhaps we need to take a harder look at the consequences of living where we do. We have long assumed that we are the rulers of the Earth and that it is our divine right to live in whichever corner we choose, regardless of costs and resources. A cataclysmic event like this should give us pause to reconsider that assumption.

[RP]

Originally Posted by Mak2525

...The insurance commissioner in Florida has let this situation pretty much become untenable by not requiring the big companies to write Homeowner's insurance, while they make record profits on auto policies off the terrible drivers in Florida.

With never having a claim, my Homeowners yearly premium has gone from $1500 five years ago to $4200 this year ($900 of this is a yearly hurricane assessment that allegedly goes into a hurricane disaster fund)! By the way, this does not cover flooding! My flood premium is another $5000!

I'm sure that those costs are hard pills to swallow, but I see a similarity between high premiums based on terrible drivers and the federal government (our tax dollars) subsidizing claims from those whose houses built on fragile oceanfront areas are destroyed...