Insurance Companies Are Going Broke With These Storms And Either Are Raising Premiums Or....

[global1]

not offering insurance.

So wouldn't it be in their best interests to lobby Congress to really get tough on climate change and work to do things to minimize the impact of these storms?

These storms aren't political. They hurt Dems and Repugs equally - and given that these hurricanes hit Florida pretty hard - I'm thinking that maybe more Repugs have been affected than Dems.

One would think that the Repugs in Congress would work with the Dems on climate change - but they always seem to resist.

Why aren't the insurance companies raising holy hell with the Repugs in Congress to support work on climate change?

[jimfields33]

1. 49.6 to 49.2 2018 governor election

Not sure why it’s constantly said that Florida is mostly republican. It’s not even remotely true.

[spooky3]

2. Good questions. Nt

[JT45242]

3. Privatize profits and socialize losses

Because they count on a bail out from FEMA if the dollar amount gets too big. Then they will raise premiums and deductible in response. They will never repay the bailout.

Why would they want change when the system is already rigged in their favor?

[SharonClark]

4. Insurance companies make their profits by

insuring people/businesses who would likely not need to file a catastrophic claim. I doubt it is in their best interest to lobby on climate crises because that would be another expense for them. They’ll just refuse to insure people/businesses in high risk areas.

[Tomconroy]

5. Stop subsidizing flood insurance.

[Frasier Balzov]

6. Which industry has the most powerful influence?

Insurance or fossil fuels?

[roamer65]

7. They have every right to stop offering coverage in these high risk areas.

…and if I were an insurance company CEO I would put the order out to do it.

Make the payouts on Ian damage and kill the policies after said payouts.

From a purely business perspective, it makes complete sense.

[Xolodno]

8. I work in the insurance industry....

...we have been complaining, only to be ignored. And we are more regulated than banks, every rate increase gets scrutinized heavily.

As for lobbying, very little funding available for that as accounting for costs follows a very specific formula, which makes it very hard.

For decades the industry has pushed to have hurricane (wind damage) set on a regional, if not national level. But of course, the "why should my premiums in SC subsidize those in FL?". So now you have this mess. Florida's FAIR Plan (it goes by a different name, but same concept) insures most of the wind damage there, that's not a good thing.

And if they want to keep it all in the private market, allow insurance companies to apply the CAT Load to a region, many states make that illegal.

The shit will hit the fan should re-insurers decide "Nope, were done with this shit". And they are not heavily regulated.

[roamer65]

9. I think this will be where they cut and run.

Would not surprise me if losses near $100B on this one.

It’s time and if I were a CEO I would give the order to do it.

[Xolodno]

11. Most of the larger insurers such as Allstate, Farmers, etc.

...only insure in areas in the central part of the state away from the coast. Some smaller insurers do take a risk with limited coastal exposure (such has having a cap on the amount of exposure in a county, zip code, etc.).

But Florida's Citizen Property Insurance Corporation (FAIR Plan) picks up the slack. Not sure how it works, but I think they assess licensed participating insurers by market share and via property tax.

And it gets worse, if its decided your home was not damaged by wind, but by storm surge, then it's a flood loss and not covered. You need a flood policy to cover that part.

[Buckeyeblue]

10. You're right. Very heavily scrutinized industry.

But don't the big companies survive because their overall loss costs stay down because they have policies in many areas where the only real concern is a house fire? It's like spreading your investments out.

Also, on big policies don't they re-insure so the overall loss potential becomes much less?

[Xolodno]

12. It all comes down to the combined ratio.

If it's 98%, that means for every dollar you bring in, you pay out 98 cents. But a company can still make a profit even at 100% combined ratio as investment income can still bring in a profit...but with the markets today....well....

And private insurers segment their books to death. Farmers uses a zip code based approach on where to insure, market, etc. State Farm uses Lattitude and Longitude. The rest, gets either sent to other insurers willing to take on more risk or the state's insurance company of last resort. So yes, they spread their risks out, but there are areas where they deem no amount of spread will work and if they did, their rates will be out of competition or worse, adverse selection.

Most reinsurance works on a treaty basis, for example, an insurance company will cede a portion of the premium to the reinsurer and when losses hit a certain threshold, the reinsurer picks up the tab after that.

But as climate change has been happening, they have been more and more cognizant of where they are reinsuring, forcing the main insurance company to crackdown on where they underwrite.

[PoindexterOglethorpe]

13. It is hardly breaking news that hurricanes

tend to strike southern states. Also other places like the Caribbean, Mexico, Central America. But in this country, if you live near the ocean in the southeastern part of this country, then you are at risk for hurricanes.

While I have a certain degree of sympathy for what has happened, those who've moved to Florida in the last 20 years or so should not have been oblivious to the danger.