The problems in Florida keep piling up but the most pressing one isn’t immigration, it’s the endless increases in insurance. As property values exploded in Florida and storms and floods cause annual damage, the state is running out of insurance options. From Yahoo Finance:
In September, Caroline Hernandez, a Florida homeowner, got a notice from her mortgage lender that her escrow account that held funds to pay her homeowners insurance and property taxes was short by $3,522 because her insurance premiums had increased.
The shortage meant that Hernandez’s mortgage payment would increase by $800 a month unless she paid the entire shortfall upfront. She did with her savings, but six months later, her escrow was short again by $1,792, which she again paid from savings.
“Florida is talking about another 40- to 60-percent increase in homeowners insurance,” Hernandez said. “I can’t afford another shortage.”
Finance Yahoo
Citizens Property Insurance, the de facto state insurance company left in Florida is asking for DOUBLE DIGIT increases to premiums.
The state-backed company asked Thursday for a statewide average increase of 13.1% for primary residences with multiperil policies. The average increase specific to homeowners for this type of coverage would be 12.6%, and 10.8% for condo owners.
But if you live in your Citizens-insured domicile less than nine months out of the year, your rate increase is likely to be a lot higher.
Palm Beach Post
On the other coast, California isn’t doing much better with constant forest fires, earthquakes and other mayhem causing billions in damage.
On a personal note, our flood insurance bill came in the mail this week and the cost over the years has grown from a premium of $250/year to $900/year today. The home in question has tripled in value so it makes sense for the premiums to have gone up but not at a rate 4 times the original cost.
Between increasing home valuations which drive property taxes, insurance, and repair & maintenance costs higher, it may become too costly to be a home owner in the future. Additionally, these higher costs for insurance and other expenses eventually drain spend on other things such as apparel, travel, entertainment, dining and other discretionary spend.
We’ll keep an eye on the situation so stay tuned, stay profitable and stay solvent…