Pretty vacuous point. The storms are getting worse.
A weak storm is next to being a non issue.
The stronger storms are a huge problem created out of the GCC.
If there is so little statistical evidence of heightened/ strengthened hurricane activity, why did Florida insurance rates triple over 5 years?
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That question is rhetorical, right?
Pete
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The recovery is likely to take longer than it should.
https://wapo.st/3BM0GEP
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Have you seen the recent movie “Civil War” ?
While it is fictional, of course, it sure feels like we are only a couple of missteps away from a self inflicted, propaganda and disinformation induced, conflict breaking out.
Look how easy it has been to spread lies about FEMA and elicit a response from people just itching for any “reason” to act. This propaganda has been spewing since hurricane Helene, despite the attempts to counter it by Governor’s of both political party’s.
Look at the graphs again. While there is no statistically significant difference in hurricane activity over the past 100 or so years, there is a detectable rising trend over the past 40 years. Which do you think insurance companies care more about?
In addition, there are other metrics that suggest a worsening hurricane impact. “Rapid Intensification”, RI, refers to tropical cyclone wind speeds increasing by about 35 mph in a 24 hr period. Storms exhibiting RI appear to be increasing in frequency, consistent with storms getting stronger and less predictable. There is also evidence that today’s tropical storms have much higher precipitation. Extreme rainfall is more common, which means more floods. And then you have rising sea levels that worsens the impact of storm surge. Now throw in the recent increases in Florida population and the increase in coastal development.
The smart statisticians and applied mathematicians at all those insurance companies mix all these possibilities together along with all the uncertainties and they end up with a risk/reward calculation saying the company should run for the exits.
Similar risk assessments have led to a broad consensus of scientists advocating far more aggressive efforts to mitigate global warming.
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More wealth in the path of the hurricanes. Houses used to be built any way a builder wanted. Now, with those dreaded housing codes, costs are higher. Cars used to be cheaper. Buildings have undiscovered liabilities. And perhaps most important, insurance companies have decided not to let Florida be a loss leader anymore, which is why so many of them have left the state entirely.
Oh, and as Dr Bob pointed out, more “stuff” to potentially wreck. That solar farm would have been just an empty field. No damage at all, except now there is. Multiply that by the number of new developments, shopping centers and the like and you have more damage, and more expensive damage.
But please don’t speak of climate change, at least in Florida. Luckily that’s been outlawed 
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From local media coverage of our insurance issues, another main factor is inflation. The cost of construction - or reconstruction in the event of a casualty - has risen sharply over the last several years. About 45% over the last four years, which is about double the general rate of inflation.
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Most of the above, but also and crucially, most market competitive Homeowners Insurance in much of Florida was a profit making scam without sufficient reserves, brought about by state politics in bed with both the Insurance sales people and the real estate industry, and so “regulation” of both leaned heavily against the long term interests of voters and the home buyers. With significant coastal flooding increasing, and national Congress feeling tight (will blue and red unite to bail out Florida again? Western North Carolina sure, but Florida yet again?) lhat nasty coalition is now “up against the wall” and so desperately attempting to be “more united than ever!”
How do you short an entire state’s endangered homes?
d fb
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I truly hate to be in a position of defending insurance companies but given the data I have a hard time seeing the “scam”, at least when it comes to raising rates or leaving the state.
Given the trend of the graph and the modeling by climate scientists of what the future will bring, I don’t see how insurance companies could do anything but raise rates or even leave the state.
Florida recently passed what many feel is a Draconian anti-immigrant bill that may have driven many construction workers out of the state. The impact of a construction labor shortage is soon to come.
The “deport 11M” line always gets applause. The “news” a day or two ago, reports polls show 54% of the USian population is in favor of mass deportations.
Steve…remembers the “Willie Horton” campaign of several years ago
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And, if FL is like many states, the property values themselves have also increased greatly over the past 5 years. (It’s been a sellers market where I live in NC and, I suspect, in many places.)
Pete
I am extremely reluctant to disagree with you btresist, because you are usually well informed and right. And I find it most likely we have a misunderstanding. What I am saying is that insurers have been making a profit all along, but few have heeded their smarter inspectors and pushed back on local or state governments or builders even as they must have seen the writing on the wall. And now, yes, they have pocketed their decades of profits (crucially bailed out by Federal gov after earlier disasters) and i will be amazed if they do not now begin to exit. And then I will be amazed if Florida state politics does not become deeply entangled in some form of State Backed Insurance. And then I will be amazed if that does not lead to much grief and tears….
d fb
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Many insurance companies only break even or even lose money on policy under writing. First reason for this is competition is brutal. People will change insurance companies to save $50. The more important reason is because they way they make the real money is investing that sweet, sweet interest free money from the float. Its okay to lose a little bit on the underwriting just to get the sale because that gives you more interest free money to invest. Also opportunities to sell the existing customer more lucrative forms of insurance.
What happens is the insurance companies get locked into a financial game of chicken to see who is willing to lose the most money on underwriting so they can keep generating interest free float. Eventually, everyone runs out of reserves and they are forced to raise premiums.
Insurance regulators are supposed to be keeping tabs on this to make sure it doesn’t get too far out of hand, but you know how that goes.
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I guess I don’t understand your position. Insurance companies are supposed to make a profit and the ways they push back on builders and local governments are by raising their rates or taking their business elsewhere. This appears to be what is happening in Florida.
Insurance company officials are not elected and so I don’t think they should be involved in making public policy concerning where people can live and what they can build. Their job is to decide what they are willing to insure and for how much.
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