[bratticus]

State Farm to leave Florida property market

... State Farm Insurance Co said on Tuesday that it would leave the Florida property insurance market within two years because it cannot raise premiums high enough to offset the hurricane risks. ...

google search on original ad slogan

[seldom_seen]

Wow! How long 'til the other Insurers pull out?

The Florida real estate market is hunched over in pain, and State Farm just came up and kicked it in the balls.

[Snowrunner]

Wow! How long 'til the other Insurers pull out?

The Florida real estate market is hunched over in pain, and State Farm just came up and kicked it in the balls.

How sad. You mean it is not a good idea to build houses in the middle of Hurricane alley? Geez. Who'd thunk.

[Sixstrings]

How sad. You mean it is not a good idea to build houses in the middle of Hurricane alley? Geez. Who'd thunk.

Many areas of the country have their issues. Earthquakes, mudslides, wildfires, and possible tsunamis out West. Tornadoes throughout the midwest. Ice storms up north. And yes, hurricanes in the South.

Throughout human history, the vast majority of people have lived very close to water. This is true today, and it ain't gonna change anytime soon.

What do you propose, abandoning California and the entire Southeast?

[Tyler_JC]

Maybe we can make people pay the true cost of living in vulnerable regions?

The Market will move people out of hurricane-prone areas.

Instead, we subsidize the construction of millions of plywood boxes in Hurricane Alley and then "declare a national emergency" every time someone gets hurt.

Well if you bail people out every time they make a mistake, they are going to keep making the same mistake, no?

Hurricanes are a perfect example of moral hazard.

New Orleans would NOT have been rebuilt by market forces. But if you pour enough federal tax money into a sinking hole, you can make miracles happen.

[Snowrunner]

What do you propose, abandoning California and the entire Southeast?

There's a difference between living on the coast in a place like California that may or may not get hit by a Tsunami (or Earthquake, heck, I am in Vancouver and we're due for a big one) or living in an area that gets hit regularly with hurricanes and is right in the path of most of them.

Heck, I am all for cutting insurance for anybody who is stupid enough to build on a flood plain, and trust me, there are ample houses here build on flood plains.

I had to laugh this morning when I heard on the radio that some people realized after the latest flooding that their insurance won't cover it (yet again) and neither does disaster relief.

Yes, we have always settled near bodies of water because they allowed us to move around the area more easily, but our ancestors weren't stupid enough to build on flood plains, at least not repeatedly.

A sure sign of someone being crazy is to do the same thing over and over again and expecting a different result.

So no, sorry, I don't feel sad for the people in Florida or anybody who has (or will) build on a flood plain and find himself suddenly with a river running through their living room.

[Snowrunner]

New Orleans would NOT have been rebuilt by market forces. But if you pour enough federal tax money into a sinking hole, you can make miracles happen.

New Orleans by itself isn't the problem. Take a look at the French Quarter.

The problem is our arrogance towards forces bigger than us. Be it a hurricane, Climate Change or the markets for that matter.

Ah, what rude awakening most of us will have in the not too distant future.

[Sixstrings]

New Orleans would NOT have been rebuilt by market forces. But if you pour enough federal tax money into a sinking hole, you can make miracles happen.

New Orleans was founded in 1718. The city has survived floods, fire, disease, wars and hurricanes. It's the birthplace of jazz and a unique cuisine. It truly is one of the few culturally unique places we have in this nation.

Abandon it because of one hurricane? Un-American, I say.

New Orleans gave us our one major victory in the war of 1812 vs. the British. That whole war was an embarassment of failure (the burning of Washington, failures at sea, etc.) save for the bravery of New Orleanians. Against overwhelming numbers, New Orleans turned back and humiliated the British invasion force.

So now, after a bad hurricane, we just let it rot you say. I say history matters, culture matters, places matter.

As for spreading around the cost of insurance.. well, it gets to a point where the cost is too much for the local market to bear, and it really must be spread nationally.

The entire nation uses products and services from California and Florida. A person in a safe state, oh let's say Kansas (we'll assume no tornadoes) probably a) watches Hollywood TV and movies, b) visits Disneyworld and Florida beaches and c) has Florida orange juice, sugar, and beef in their kitchen.

So even though you may not live in Florida, you benefit from Florida in many ways.

[kpeavey]

TROLLING

The Open Discussion Forum is the location for topics unrelated to Peak Oil.

[ReverseEngineer]

New Orleans would NOT have been rebuilt by market forces. But if you pour enough federal tax money into a sinking hole, you can make miracles happen.

New Orleans was founded in 1718. The city has survived floods, fire, disease, wars and hurricanes. It's the birthplace of jazz and a unique cuisine. It truly is one of the few culturally unique places we have in this nation.

Abandon it because of one hurricane? Un-American, I say.

New Orleans gave us our one major victory in the war of 1812 vs. the British. That whole war was an embarassment of failure (the burning of Washington, failures at sea, etc.) save for the bravery of New Orleanians. Against overwhelming numbers, New Orleans turned back and humiliated the British invasion force.

So now, after a bad hurricane, we just let it rot you say. I say history matters, culture matters, places matter.

Its more than just its historic or cultural importance, New Orleans has current ECONOMIC importance. Its the Port at the mouth of the Mighty Mississippi. Despite the fact its located in a Hurricane Zone and despite the fact it is in many areas below seal level, from where ELSE would you ship out the grain produced in the midwest, from where else would you ship in Oil for those farms? Beyond that, quite nearby you have the LOOP, the only real place Supertankers can offload their oil. You need Staff for all thesee places, longshoremen and oil workers and just warehouse grunts to move the goods on and off ships and store them.

NOLA is a HUB, and has been a hub since the French Quarter got built, because of its location at the mouth of the Mighty Mississippi. It got further built up as our society got built up, and we sought to tame the problems with the expertiese of the Army Corps of Bozos, but of course as Oil runs thin mainating all those pumps to keep it high and dry gets harder all the time, as the Hurricanes seem to get more frequent all the time.

In the desperate attempt to continue our way of life, NOLA HAD to be rebuilt and resurrected. And so billions were poured into that, only to see much of what was rebuilt destroyed again when Gustav and Ike came hurtling down the Pike, more Soldiers of Mother Nature who would destroy our hubris at trying to control the world with the thermodynamic energy of Oil. It worked for a while, now there just is not enough left to run ALL those systems, and one by one they are breaking down and falling apart, and no we cannot keep rebuilding them, even IF AIG was solvent and paid faithfully on the Insurance claims.

You just cannot build this big. NOLA worked as a port when we just needed the French Quarter, when we reclaimed all the below sea level stuff, it became too energy intensive to maintain. In the aftermath of Peak Oil, New Orleans will still be improtant. Just it will only be the Frenc Quarter that is left there. The rest of it will be reclaimed by Mother Nature when the Oil runs out.

Reverse Engineer

[yesplease]

The Florida real estate market is hunched over in pain, and State Farm just came up and kicked it in the balls.

I can't blame 'em. Having to insure housing that's periodically flattened by hurricanes, especially in light of potentially disastrous changes in climate, isn't the best way to run a business. Unless of course we're talking about running a business into the ground.

[BlueGhostNo2]

I never understood why Americans in those places don't build proper houses with y'know, bricks 'n concrete. If I lived in hurricane alley my house would be small sustainable and built like a fortress.

[dinopello]

I have State Farm insurance. My rate is mediocre for the area but it's not worth it right now to shop around. I've never had a claim but my sister nearby has and they treated her fairly. One thing that really pissed me off is that there is a surcharge or slightly higher rate applied to my house because it is over 50 years old (it's actually 104 years old). Seems to me it should be the opposite since it has proven itself. I told the agent that too, and he went on about how old houses are all different and some have old wiring and blah blah blah.

edit: I'm in Virginia, not Florida in case that was confusing.

[sittinguy]

DAMMIT, I have state farm. This is gonna suck.

And by the way house's don't get flatend here, people lose alot of shingles, and maybe a tree falls on the house. Its not that bad. My house only lost a few shingles and a tree fell on my shed. I never made a claim. I just took care of it myself.

Stat farm was asking for a 47% increase. Why didn't they just shoot for something that would have gotten approved?

[shortonsense]

Wow! How long 'til the other Insurers pull out?

.

I thought alot of them already had? It was in the news a year or so back when Allstate left I think.

[hope_full]

About those "old houses" and homeowners' insurance...

Last spring, we had a tornado dance around in a nearby community (Suffolk, VA). Being born and raised in this area, I know a lot about the local architecture.

The McMansions in that community (built in the 1990s) offered little or no resistance to the swirling funnel clouds and all that remains of some of those modern houses is a slab, lots of splintered wood and pink insulation. Conversely, the tornado also went through an older section of town. Those older homes (pre-WW2) lost roofing shingles and windows and even pieces and parts of their exterior walls, but the homes remained secure.

A home's primary function if provide shelter from the storms of life. IMHO, contemporary construction gets a big fat "F" in that regard. Older houses can take a lot of bad weather and remain on their feet. As another poster said, they've proven themselves over time.

Most of these Florida houses that take the worst hit from hurricanes are post-WW2 houses. It's time to revisit the way we build homes. Maybe particle board and 19-year-olds running across the roof with a pneumatic nailing gun, hitting the ocassional roofing joist isn't providing the quality of construction we need in Hurricane Alley.

If you were an insurance company, would you continue to underwrite other people's stupidity (rebuilding crappy houses in a crappy area with crappy weather)?

I wouldn't.

[vision-master]

Maybe we can make people pay the true cost of living in vulnerable regions?

The Market will move people out of hurricane-prone areas.

Instead, we subsidize the construction of millions of plywood boxes in Hurricane Alley and then "declare a national emergency" every time someone gets hurt.

Well if you bail people out every time they make a mistake, they are going to keep making the same mistake, no?

Hurricanes are a perfect example of moral hazard.

New Orleans would NOT have been rebuilt by market forces. But if you pour enough federal tax money into a sinking hole, you can make miracles happen.

Yeah, all those rich developers 'took' the coast line and built condos for the weathy, with taxpayers money. Screw the poor ppl.

[frankthetank]

I live in a flood prone area right along the banks of the Mississippi. When we get flooding in this area, in almost every case, flood insurance does not cover a dime. This has to do with the water coming in from the basements and not through the front door (which is usually always the case locally). These same people HAVE to take flood insurance which adds a lot onto your yearly bill.

Hasn't it been stated somewhere that Miami, FL is the most likely spot on the planet to be hit by a hurricane? I could be wrong. They are VERY DUE for a big one. Last one in that area was Andrew and that went south of town.

Doesn't matter because FEMA will just pick up the tabs when these people start crying because their houses are now in the ocean.

[MarkJ]

Many of our customers with homes in wet areas don't have, can't afford or can't get flood insurance. Government, state, local or private money often bails them out.

Makes you wonder how many times they'll replace furnaces, boilers, water heaters, sump pumps, pressure tanks, electrical, flooring, appliances, lower/framing/drywall/lath/plaster before they say no more.

We've replaced heat and hot water equipment in some of the same homes several times.

When they renovate or rebuild, they often don't address the drainage and basement water proofing issues which allowed them to flood in the first place. Many of these homes should have back-up sump pumps and furnaces, boilers and water heaters should be elevated or moved to the first floor.

[canis_lupus]

State Farm is in business to make money. They aren't in business to subsidize people's homes. If they aren't making money they're losing money...anybody here go to work to lose money every day?

I have to check, but a friend of mine in the insurance biz told me that it is illegal for the insured in, say, Illinois to make up the difference in the disaster zones of FL and LA.

With the government capping the amount State Farm could raise rates, who could feel this is unfair?