This is a pretty good story by Melissa Nelson of the Associated Press: in Pensacola Beach, Florida, only 5 of 354 residential properties on the market in January sold. Some anecdotal evidence exists that high insurance rates are a factor. However, a couple other things jumped out at me from the story and point to how this insurance mess in Florida can get much, much worse. Here’s one:
Sen. Mike Fasano, R-New Port Richey, points to a spike in the number of residential loan foreclosures in his Tampa Bay-area district as proof of the dire need for insurance reforms.
"People can no longer afford their mortgage payments because of their insurance premiums," said Fasano, who has authored legislation that would provide grants to help low- and middle-income homeowners with insurance rate hikes.
That is correct. You read that a state senator is proposing direct taxpayer subsidies of folks with high insurance premiums.
Here’s another thing that jumped out at me:
Fasano is also pushing legislation that would require the state-created Citizens Property Insurance, Florida’s largest insurer, to refund the cost of private appraisals for homeowners whose insurance rates are later lowered.
Citizens customers can challenge rate increases by seeking a private appraisal. Fasano said the private appraisals sometimes show that Citizens’ rates are based on inflated property values.
That is correct. You read that a state senator wants to put further pressure on the state-run insurance company to charge artificially low rates not only by subjecting it to an appeals process but by making it pay the cost of residential appraisals when the homeowner finds a lower appraisal. Subsidies are like caffeine, once you get accustomed to them, you can’t start your day without them.