As
@PARA45 correctly stated, many property insurance carriers did not have enough funds and defaulted on tens of thousands of claims post-Hurricane Andrew... Back then, Florida never required insurance carriers in the State to prove they had the liquid assets to pay in the event of another catastrophic storm like Andrew. Many folks who "thought" they were covered got nothing...
That reality led to the State's creation Citizen's Insurance which to this day, provides about 70% of all the property insurance in Florida. However, because of their own growing unfunded liability, Citizens has been doing a mass shedding of policy holders in the last 3 years... Citizens now has the right to drop you if they can provide another insurer that offers a premium that is no higher than 20% of the Citizens rate being offered. Governor DeSantis has offered incentives for more insurance carriers to enter the market in Florida which has offered some relief to Citizens unfunded burden. The bad news is that most, if not all, of these carriers are jumping their rates significantly after the first year of coverage or as an assessment in the wake of a recent hurricane even if the storm did not impact the insured's immediate area.
The second, and mostly unspoken part of the problem since Andrew has been the massive number of frivolous claims that have been submitted in the wake of these storms resulting in premiums going through the roof. For years, many homeowners have filed claims for new roofs, patio enclosures, etc., in the wake of a storm even though the storm itself caused minimal or no damage. In other words, people were getting new roofs, new fences, and new patio enclosures, for storms that had no direct impact on their area. This is possible because Florida law allows the use of private third-party adjusters that will qualify an often-inflated claim which must be honored according to the current coverage rules. Adding salt to the wound, every policyholder under Citizens gets hit with a rate assessment every time there is a storm in the state regardless of whether or not the storm impacted them directly...
On top of all of this, buyers and sellers are having a huge problem during the sale of a home where the assessed value of the home is drastically different than the selling price. Insurance companies will not offer coverage on homes that are selling way over market value, and banks will not finance mortgages on homes that do not have enough insurance to cover the replacement value of the home resulting a huge number of potential buyers who cannot qualify for financing because they cannot get insurance...
Suffice to say, homeowners' insurance in Florida is a major issue for most residents... I know many homeowners including myself that no longer have a mortgage who are rolling the dice and not paying for the "windstorm" coverage which is the hurricane damage part of the policy... Unfortunately, most homeowners are not in the financial position to self-insure in the event of a catastrophic storm.
Suffice to say, the homeowner's insurance situation in Florida is a mess with no viable solution in sight... It's one of the very few criticisms I have of Governor DeSantis who has not addressed this crisis aggressively enough for whatever reasons. The folks in Cali will likely have to create some kind of State sponsored insurance company like Citizens, however, they will likely face the same issues that we are dealing with in Florida when the pool of insured gets so large it becomes an unfunded liability...
www.bbc.com
www.newscentermaine.com
