Hurricane Michael

We have a limb through our roof and into our living room thanks to Michael. Thankful that is all there is. The adjuster will be here tomorrow. We have never filed a homeowners claim before so who knows how it will go. I expect all our rates to go up in Florida as a result of these claims being filed.
 
So if they pull out of entire states, that means they have a smaller pool of potential clients, right? Let's say they don't insure Florida, Alabama, Mississippi, Louisiana and Texas due to the large hurricanes. That's a LOT of businesses. Take off the parts of TX that don't have destruction from hurricanes and you still have a LOT of potential clients that they will no longer have.

The company still has to make a profit, no? So wouldn't that still mean higher premiums for the people they will insure?

And the thing is, Katrina was 15 years ago. There hasn't been a major storm HERE since then. There were some before her that did damage but not catastrophic. The last one that did that was perhaps Camille. In 1969. Maybe I can move that up some to Fredrick in the late 70's. There were a couple of others that caused power outages and damage to certain structures but not like those two.

In Florida, this is the first one in decades to hit the panhandle like this. And in the years that Florida does take a hit, its not the whole state or even the same parts of the state.

So, my point is, they are withdrawing from entire states for something that happens once a decade in an area? With the price of premiums and the number of insured they have that don't make claims ever, they got to be recouping that money. I don't know, sounds like to me they want to be in the business of writing policies without payouts. Not what insurance is really supposed to be, is it?

They aren't out of entire states yet, just regions of states at this point. They are modeling the possibility based on changing weather patterns and warming oceans because they are predicting these storms are likely to increasing in frequency and severity. They are lowering the weight given to history and increasing the weight given to prediction but they are going to watch the claim numbers. They wouldn't pull out of states based on what is happening now but as we start seeing these hurricanes hit more and more frequently and dump more and more water the high risk areas will grow.

The whole business model of insurance is lowering risk. They want to take in more premiums than they pay out. There is more to it with investment and lending of that money but that is the 10,000 foot view. If you stop insuring customers with a risk profile higher than you are willing to take on you don't have to replace them with more low risk customers because your payouts go down proportional to your premiums.
 
I really hope that all who have lost everything can rebuild, I know it's probably impossible for a lot of them. I prayed for the area, and since I had a bit extra this month I gave what I could to the Red Cross. These new, stronger storms every year are really frightening. I can't even imagine what it was like for the people of the panhandle and other areas. :sad2:
 
First and foremost, I feel horrible just looking at the pictures out of Florida, it's absolutely awful. Going through a tragedy like that is horrifying.

Just have to :sad2: :rolleyes2 on the anti-insurance stuff, largely unfounded. As many here know, it's how I make my living. Carriers, at least all the ones I know well, work very hard to try to help their insureds after an event such as this.

As for writing risks in Florida or other areas very prone to disaster, it's complicated, but yeah it's a big risk. My company writes in AL, GA, etc..., but doesn't write in Florida. Not just because of catastrophe risks, but also because the state of Florida is a "catastrophe" when it comes to the general insurance environment anyway. But strictly sticking to the risk of a catastrophe, it's definitely a financial gamble. You may collect $3000/yr in premium, but insure a $1M structure sitting right off the beach...pretty scary proposition.
 


First and foremost, I feel horrible just looking at the pictures out of Florida, it's absolutely awful. Going through a tragedy like that is horrifying.

Just have to :sad2: :rolleyes2 on the anti-insurance stuff, largely unfounded. As many here know, it's how I make my living. Carriers, at least all the ones I know well, work very hard to try to help their insureds after an event such as this.

As for writing risks in Florida or other areas very prone to disaster, it's complicated, but yeah it's a big risk. My company writes in AL, GA, etc..., but doesn't write in Florida. Not just because of catastrophe risks, but also because the state of Florida is a "catastrophe" when it comes to the general insurance environment anyway. But strictly sticking to the risk of a catastrophe, it's definitely a financial gamble. You may collect $3000/yr in premium, but insure a $1M structure sitting right off the beach...pretty scary proposition.

For some of us, the mess after Katrina made us very insurance wary. But I am not "anti insurance". I like my company. They paid quickly when our house burned, I couldn't have asked for better treatment and didn't give us any real issues after Katrina. Other folks weren't as lucky. They were lied to and not paid as they should have been.

I was just asking questions to understand how it works.

So what do the people of Florida do about insurance? Is there high risk insurance for people that live in areas other insurance companies won't cover?
 
We have a limb through our roof and into our living room thanks to Michael. Thankful that is all there is. The adjuster will be here tomorrow. We have never filed a homeowners claim before so who knows how it will go. I expect all our rates to go up in Florida as a result of these claims being filed.


So sorry. The destruction is heart breaking. And unfathomable, but reminds me of what we saw with Katrina . Mother nature can be a beast.

Much help from Mississippi Gulf Coast is heading to Florida.
 
I'm not sure how that would work unless you offset the huge losses in parts of the country prone to hurricanes, floods, fires, and earthquakes by drastically increasing the costs for people in less-prone areas and I don't want to see that.

Yea, I've seen your stance on this before.

I liken it to the crazy people who build homes on the sand dunes here in MA - build in a high risk area, pay the price. But don't spread the cost to those who are making safer choices where to live/build. I live in an area that floods, so we bought a home high up on a hill. The insurance agent laughed when we got to the flood insurance part - he stated "if you need flood insurance, we're all doomed and there'd be no one around to pay the claim." But we have coverage for everything else - and we've had earthquakes, tornadoes, blizzards, and hurricanes. MA is such a fun state to live in!

My mom lives near the ocean - in the summer she's got her house high on a ledge cliff a hundred yards away from the shoreline. In the winter she heads down to Florida and lives in a cottage a few blocks from the bay. She made sure her house was set back inland enough to not be in the usual flooding area, but she'd get flooded out if the storm was a big one. She knew the risk going in, so there's nothing valuable in the house that she couldn't fit in her car for evacuation. The house itself is elevated, made of concrete block, and has hurricane shutters. But if it goes, it goes. I don't think she'd rebuild in that spot at her age, but if she did, it would need to be built to withstand a cat5. That's just common sense. But if you live near the coast of any state, you've got to be prepared to lose buildings.
 


I liken it to the crazy people who build homes on the sand dunes here in MA - build in a high risk area, pay the price. But don't spread the cost to those who are making safer choices where to live/build. I live in an area that floods, so we bought a home high up on a hill. The insurance agent laughed when we got to the flood insurance part - he stated "if you need flood insurance, we're all doomed and there'd be no one around to pay the claim." But we have coverage for everything else - and we've had earthquakes, tornadoes, blizzards, and hurricanes. MA is such a fun state to live in!

My mom lives near the ocean - in the summer she's got her house high on a ledge cliff a hundred yards away from the shoreline. In the winter she heads down to Florida and lives in a cottage a few blocks from the bay. She made sure her house was set back inland enough to not be in the usual flooding area, but she'd get flooded out if the storm was a big one. She knew the risk going in, so there's nothing valuable in the house that she couldn't fit in her car for evacuation. The house itself is elevated, made of concrete block, and has hurricane shutters. But if it goes, it goes. I don't think she'd rebuild in that spot at her age, but if she did, it would need to be built to withstand a cat5. That's just common sense. But if you live near the coast of any state, you've got to be prepared to lose buildings.

In Katrina, they were prepared. They had insurance and they had flood insurance and they wouldn’t pay. The homeowners said it was flood and the flood said it was hurricane damage.

Also, keep in mind that a lot of those houses on the coastline lost in Katrina had been there since before the Civil War so they didn’t just build there.

Wherever your mom’s cottage is in Florida, it’s great that she can grab everything and evacuate easily but while she is there does she eat in restaurants? Go to the grocery store? Buy gas? Eat the seafood? All those people with jobs in those businesses have to live somewhere. They don’t have the luxury of just coming down for the winter. If they didn’t live there, there would be no town for your mom to enjoy the warmer weather in.

It’s easy to be in another state and say “they should be prepared”. They have insurance. They have all the hurricane resistant and coded homes and business and with something like Michael or Katrina, it does no good.

The billion dollar casinos on our coast were supposed to be hurricane proof. They ended up in the gulf or on the other side of the highway on top or other businesses. Almost all of them were destroyed.
 
The whole insurance thing is going to get worse. How many 100 year events do we need to see each year in America (floods, hurricanes, wildfires, etc) before we start to realize we've got a BIG problem that isn't going to get better by sticking our heads in the sand? The day is coming, and quickly, where homeowner's insurance will be a thing that only very wealthy people will be able to afford. And, some states won't be able to get it at any price. What does that do to homeownership?
 
The whole insurance thing is going to get worse. How many 100 year events do we need to see each year in America (floods, hurricanes, wildfires, etc) before we start to realize we've got a BIG problem that isn't going to get better by sticking our heads in the sand? The day is coming, and quickly, where homeowner's insurance will be a thing that only very wealthy people will be able to afford. And, some states won't be able to get it at any price. What does that do to homeownership?


Stands and applauds.
 
The whole insurance thing is going to get worse. How many 100 year events do we need to see each year in America (floods, hurricanes, wildfires, etc) before we start to realize we've got a BIG problem that isn't going to get better by sticking our heads in the sand? The day is coming, and quickly, where homeowner's insurance will be a thing that only very wealthy people will be able to afford. And, some states won't be able to get it at any price. What does that do to homeownership?

You are absolutely correct. You will see large areas of the country deemed uninhabitable as far as insurance goes. In the end people will just have to stop living there or deal with not being insured. There will be no businesses because you can't business loans without insurance.

More severe weather is going to be the norm and the country will literally shrinknin inhabitable living space.
 
You are absolutely correct. You will see large areas of the country deemed uninhabitable as far as insurance goes. In the end people will just have to stop living there or deal with not being insured. There will be no businesses because you can't business loans without insurance.

More severe weather is going to be the norm and the country will literally shrinknin inhabitable living space.

So what is the answer? I don’t think most of the country living in a few states is going to realistic. I mean as has been shown hurricanes can affect huge areas and many miles inland.
 
The whole insurance thing is going to get worse. How many 100 year events do we need to see each year in America (floods, hurricanes, wildfires, etc) before we start to realize we've got a BIG problem that isn't going to get better by sticking our heads in the sand? The day is coming, and quickly, where homeowner's insurance will be a thing that only very wealthy people will be able to afford. And, some states won't be able to get it at any price. What does that do to homeownership?

Nobody knows for sure, but being an industry insider, I can tell you that is HIGHLY unlikely.
 
So what is the answer? I don’t think most of the country living in a few states is going to realistic. I mean as has been shown hurricanes can affect huge areas and many miles inland.

I don't think anyone has that answer. The changing climate will likely come with a high kill off of mammals, including humans, so there very well will be far less people that need to be housed anywhere.
 
I don't think anyone has that answer. The changing climate will likely come with a high kill off of mammals, including humans, so there very well will be far less people that need to be housed anywhere.
Or maybe Yellowstone blows and we're all toast.
 
I don't think anyone has that answer. The changing climate will likely come with a high kill off of mammals, including humans, so there very well will be far less people that need to be housed anywhere.

Ok, this is getting to sound like a prophecy of the apocalypse.

I don’t deny climate change exists. But in the changing of our earth, it has changed before and will change again.

Also if you look at hurricanes and the history of tracking them, the worst were in years past and many years apart. Again, they don’t hit the same area every time. So in all honesty, the “worst to hit the MS coast” one year and the “worst to hit the panhandle” another year and the “worst to hit Texas” in another doesn’t spell the “end is coming” to me at all.
 
Nobody knows for sure, but being an industry insider, I can tell you that is HIGHLY unlikely.

So to be clear, you don’t think it will become impossible to get homeowners or business insurance in certain areas? Or am I misunderstanding you?
 
So to be clear, you don’t think it will become impossible to get homeowners or business insurance in certain areas? Or am I misunderstanding you?

Correct. I'm on the claims side of the business, so I'm not the foremost expert in underwriting, but from what I do know, I don't think it'll be near impossible to get insurance. Just like insuring a teenage driver is very expensive, insuring a property in a very high risk area is/will be expensive, but I don't see it going away. The insurance industry is highly regulated.

Well, unless the apocalypse happens, at which point it's a moot conversation anyway. :D
 
Ok, this is getting to sound like a prophecy of the apocalypse.

I don’t deny climate change exists. But in the changing of our earth, it has changed before and will change again.

Also if you look at hurricanes and the history of tracking them, the worst were in years past and many years apart. Again, they don’t hit the same area every time. So in all honesty, the “worst to hit the MS coast” one year and the “worst to hit the panhandle” another year and the “worst to hit Texas” in another doesn’t spell the “end is coming” to me at all.

I think the issue is that if you have a $4-$45 billion dollar storm even every other year it’s not sustainable. Storms today come with an enormous price tag because more people are moving to riskier areas, building more expensive structures, all while the risk of even minor weather events creates more damage.

My grandparents lived in Florida in the 60s...you wouldn’t build on the barrier islands then like you do today- they’re barrier islands meant to take the brunt of hurricanes. Just in comparison the population of FL: 2.8million (1950), 20.9million (2015). IL for same period: 8.7million (1950], 12.9million (2015). Florida increased almost 900% while Illinois increased 50% (using very rounded math).

The natural landscapes of these coastal areas just can’t keep up with the population explosion combined with poor land regulation (who thinks it’s a good idea to put a $50million condo complex a 300 ft from high tide??) so add even normal climate and you have a problem, but we aren’t in a normal climate anymore either.
 
Correct. I'm on the claims side of the business, so I'm not the foremost expert in underwriting, but from what I do know, I don't think it'll be near impossible to get insurance. Just like insuring a teenage driver is very expensive, insuring a property in a very high risk area is/will be expensive, but I don't see it going away. The insurance industry is highly regulated.

Well, unless the apocalypse happens, at which point it's a moot conversation anyway. :D

Thanks. And that does make sense. I don’t like the idea of paying higher insurance (who does?) but I can certainly understand it. And when you liken it to insuring a teen aged or other high risk driver, it makes perfect sense.

I don’t live on the coast but honestly close enough to possibly have higher premiums at some point due to hurricanes.
 

GET A DISNEY VACATION QUOTE

Dreams Unlimited Travel is committed to providing you with the very best vacation planning experience possible. Our Vacation Planners are experts and will share their honest advice to help you have a magical vacation.

Let us help you with your next Disney Vacation!





Top