this post was submitted on 18 Jul 2023
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More insurance companies are fleeing the state because of the growing threat from natural disasters.

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[–] Mog_fanatic@lemmy.world 49 points 1 year ago (6 children)

"Unfortunately, Florida's insurance market has become challenging in recent years," the company said in a statement emailed to CBS MoneyWatch. "Last year's catastrophic hurricane season contributed to an unprecedented rise in reinsurance rates, making it more costly for insurance companies to operate."

This is hilarious and sould crushingly unsurprising. People actually ended up needing to use the insurance the companies were offering soooo they are just no longer offering it. Proving once again (for the millionth time) insurance companies have absolutely zero desire or feel any moral obligation to actually help people. It is 100% purely a money making operation. The millisecond they actually have to help any of their customers out, they will bend over backwards to get out of it and if they can't, they'll just leave entirely and not insure you. Beautiful. God I hate insurance so much.

[–] dragonfly4933@lemmy.dbzer0.com 29 points 1 year ago (2 children)

Insurance doesn't work very well for things like hurricanes. When big events happen that cause large percentages of their policy holders to file claims at the same time, it results in large payouts which causes increases in price. When prices go up, people don't insure. This combined with the fact that florida gets hurricanes means prices for insurance are high.

Maybe the state could help by introducing laws to help combat insurance fraud, but that could lead to consumers getting fucked by their insurance companies.

[–] clutchmatic@lemmy.world 32 points 1 year ago* (last edited 1 year ago) (1 children)

You are being downvoted unfairly. There is greed at play, but there is math and economics as well.

The state could also help by reviewing building codes and infrastructure to make the losses due to hurricanes less severe but, with Florida republican votes not understanding the benefits of government helping address externalities for the benefit of everyone, there's no chance the situation will improve there...

[–] TheDarkKnight@lemmy.world 3 points 1 year ago

Most insurance companies strive to avoid excessive profits, honestly and aim for a combined ratio of something less than 5% profit. It's a fairly competitive field, getting greedy results in losing policies and is very price reactive. Consumers can change pretty easily and do so regularly.

[–] nednobbins@lemmy.world 4 points 1 year ago

Insurance can work just fine for things like hurricanes. Insurance companies have several methods to address it. They're all effectively variations of buying insurance policies themselves.

Re-insurance pools are a close analog. It's basically a bunch of insurance companies from around the planet getting together and agreeing to pool risks. Big companies also use a bunch of funky financial instruments to simulate insurance.

There's some risk of increased systemic correlation (eg climate change may increase the risk that major hurricanes hit multiple areas around the planet simultaneously). That's largely mitigated in that we can see it coming. Climate change is pretty prominent in their models and they can adjust premiums or stop offering policies, over time.

The bigger risk is in synthetic systemic risk. It's burned us a bunch of times already and it's gonna do it again. Those giant global re-insurance pools are almost certainly fine, and worth the risk, if we just use them for their intended purpose. But history shows that we'll end up creating derivatives contracts on them and those contracts will get leveraged. Those leveraged pools end up merging and turning into giant financial time bombs.

[–] Treczoks@lemmy.world 15 points 1 year ago

Are you actually surprised that an insurance company is not there for the good of the people, but to make money? They did keep their contractual obligations and paid out their customers, so you cannot fault them for that.

And what the insurance companies are doing is quite normal behavior. They analyze business risks and move out of fields that are not profitable. They are now telling you that they will no longer cover you so you can find another insurance to take over business. That those other insurance companies are more expensive is just founded in the fact that Florida is already a risky state, and the risks just skyrocket through global warming. And with the water temperatures rising as they do, I expect this year to have an interesting hurricane season.

People complain again that they cannot afford to move to safer places. Maybe now they can start thinking whether they can afford not to move to safer places instead.

[–] SeaJ@lemm.ee 9 points 1 year ago (1 children)

If they think last year's hurricane season was bad, wait until this year with 38°C (100°F) water.

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[–] FattestMattest@lemmy.world 5 points 1 year ago (2 children)

Not saying insurance companies are good but I've read a lot of the problem is with insurance scams where a roofing company will tell the homeowner they can replace their roof for free with insurance, even if it's not necessary. Then that company will sue the insurance Co if they don't pay for it.

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[–] madcaesar@lemmy.world 41 points 1 year ago (4 children)

If only the gays would stop marrying the hurricanes would stop and premiums would be lower! - Florida republican voter, probably

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[–] Kwalla@lemmy.todayyoutomorrow.me 34 points 1 year ago (1 children)

Wonder how DeSantis or his successor will spin things when the only option left is to make a government run single payer system for anyone to have coverage.

[–] diamonddozen@kbin.social 26 points 1 year ago (2 children)

Unfortunately, Florida already has a socialized insurance "corporation", Citizens Property Insurance Corp. Tens of thousands of policy holders this year were forced to move to other insurance companies if those companies would offer them insurance for up to 20% higher than they would get with Citizens.

You can only get Citizens if you cant get insurance through any other provider. Citizens coverage requires you to get flood insurance regardless of if you're in a flood zone or not (arguably, this is smart for Florida, but does make insurance much more expensive), and the policy doesn't cover nearly as much as you would get with other insurance companies.

As more and more news articles come out about various home owners insurance companies leaving Florida we're seeing more companion articles about how Citizens is completely fucked up. To tl;dr some stuff, basically if Florida sees a bad hurricane and Citizens has to pay out, everyone who's on citizens is royally fucked because they just don't have the money to pay out.

I have all the confidence that if Florida lost all of the free market insurance and was forced to provide a socialized universal insurance scheme that Republicans would continue to run it as competently as they currently are.

[–] somethingsnappy@lemmy.world 9 points 1 year ago (1 children)

And all of that is just lip service bullshit waiting for a government emergency declaration to bail them out. Again, and, again, and again

[–] CmdrShepard@lemmy.one 8 points 1 year ago (1 children)

Yep they'll ask for a bailout from the federal government, and when anyone brings up anything about the hypocrisy, the lack of private insurance companies, or the mismanagement of the state run insurance fund, they'll respond with "How DARE you politicize a disaster such as this!" in their special, concern-trolling sort of way.

[–] Buddahriffic@lemmy.world 4 points 1 year ago

Sounds like it would be a good idea to defederate from Florida. Then they can say whatever they want in their own instance while everyone else carries on with their not Florida lives.

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[–] islandofcaucasus@lemmy.world 29 points 1 year ago (3 children)

So serious question, does the fact that insurance companies are giving up millions of potential customers prove that climate change/disaster is real?

[–] stopthatgirl7@kbin.social 28 points 1 year ago (1 children)

IIRC, that’s part of why they’re pulling out of Florida. DeSantis made it law that they can’t change premiums based on climate change, so they’ve decided it makes more sense for them to pull out than risk huge payouts when they can’t change premiums.

[–] islandofcaucasus@lemmy.world 6 points 1 year ago

Honestly I'm pretty sure a similar problem is happening in California.

[–] Treczoks@lemmy.world 19 points 1 year ago (1 children)

Just look at the rising water temperatures. It will be an interesting hurricane season this year.

[–] Angry_Maple@sh.itjust.works 11 points 1 year ago* (last edited 1 year ago) (3 children)

No fucking kidding, eh?

I hope that the wind shear from the el Nino holds up for the people in the US and parts of Canada. It seems like the NOAA are thinking that this el Nino might not be as much of a saving grace as usual. The current temperatures are worse than they were at the peak of any other hurricaine season, and this one is still just getting started. I'm concerned with how bad the temperatures will be at the peak.

From what I read, we haven't really experienced this before. This year's sea temperatures are the hottest on record. We're already getting to the point where things will become increasingly difficult to predict.

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[–] Klear@lemmy.world 15 points 1 year ago

I don't think most of deniers deny the climate change is real, they moved the goalposts to "it's not caused by humans" a while ago and I'm pretty sure they're currently shifting them again to "it's too late do anything anways".

[–] danhasnolife@lemmy.world 27 points 1 year ago (1 children)

Insurance companies are about the purest form of capitalism around. If they aren't making money, they aren't going to participate. This is going to be a problem for California, Florida, Louisiana, and places in the Mountain West.

[–] astanix@lemmy.world 17 points 1 year ago (1 children)

My grandfather told the family that his premiums are going up so much in September that he has decided to just sell his house and move to South Carolina. I don't know what he was paying or how much they are increasing it but it must be bad if he's moving after living there for 30+ years.

[–] islandofcaucasus@lemmy.world 13 points 1 year ago (1 children)

Bummer that he sold everything just to move to another future climate casualty

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[–] outdated_belated@lemmy.sdf.org 11 points 1 year ago

CA is also having some issues I believe, for partially related reasons

[–] dan1101@lemmy.world 11 points 1 year ago (1 children)

Even CBS does clickbait now. First sentence in article:

AAA will not renew the auto and home insurance policies for some customers in Florida, joining a growing list of insurers dialing back their presence in the Sunshine State amid a growing risk of natural disasters.

Some customers. Will that be dozens, thousands, millions?

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[–] rusticus1773@lemmy.ml 11 points 1 year ago (2 children)

Can we see an article with which insurance is left? Will there only be smaller companies that just claim bankruptcy after the next hurricane and then Florida asks taxpayers to bail them out? Fuck that.

[–] OldWoodFrame@lemm.ee 10 points 1 year ago (1 children)

All the insurance companies have insurance too (reinsurance) amd there is a state-run insurance company so it's not big a deal that they'll go out of business, it's that costs are just rising ridiculously fast. They just passed a law full of legal changes the insurance companies wanted (like making it harder to sue insurance companies) just to keep costs rising at "only" 40% in a year.

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[–] md5crypto@lemmy.world 3 points 1 year ago

Is all of Florida a risk, or only down state?

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