The episode details the recent history of Florida's homeowners insurance market, which was plagued by excessive litigation, accounting for a disproportionate number of national lawsuits. Legislative reforms in 2022 and 2023 aimed to curb this issue, and the market is now seeing positive effects, such as new insurers entering the state and the state-backed insurer shedding policies.
While Florida's insurance rates have seen a significant 54% cumulative increase since 2019, the analysis shows this is part of a national trend (44-45% average). Furthermore, other states are now experiencing even faster rate hikes, suggesting Florida's crisis, while severe, is not unique and its legislative actions may be tempering further increases relative to the rest of the country.
The discussion covers Florida's existing homestead exemption, which caps annual property tax assessment increases at 3%, and a recent, more radical proposal to eliminate property taxes for homesteaded properties. The failure of this bill underscores the political and fiscal challenges of implementing major tax cuts that could defund local services like fire departments and infrastructure.
The episode distinguishes homeowners insurance from flood insurance, noting that the latter is a separate, federally managed program. It addresses the 2022 FEMA methodology change and clarifies that flood insurance is generally obtainable, even for previously flooded properties, and that policies can sometimes be transferred from seller to buyer to ease the initial cost burden.
Keep pulling the thread on Florida.