Let's pick out a few things: So... the $30b in reinsurance costs is being amortized by the reinsurance firms. It's totally about your ability to sue your insurance when they refuse to pay a claim, though. Take that down? And yeah your insurance firm will for sure incur fewer expenses! Supply and demand, Noah! Climate economics! “Where am I going to get the extra $4,000?” Mr. Firestone said. “Worst-case scenario, I will have to go into credit-card debt.” Schoolteachers? Have a hard time finding an extra $4k for home insurance. Kardashians? Not so much. Who donates more politically?Various factors are at play, insurance executives and analysts say. Two hurricanes that slammed the state—Irma in 2017 and Michael in 2018—generated claims with an estimated cost of about $30 billion. The cost of reinsurance, which insurers take out to cover some of the risk in the policies they sell, is swelling. Of particular concern, executives say, are excessive litigation over insurance claims and a proliferation of what insurers see as sham roof-related claims.
“The industry is in a panic because it is losing so much,” said Barry Gilway, chief executive of Citizens Property Insurance Corp., a state-backed insurer of last resort that is growing rapidly as private-sector insurers retrench. Barring changes, he said, “rates will continue to skyrocket and it absolutely will have an impact on the real-estate market.”
Eric Firestone, a 37-year-old teacher who lives with his wife in the Miami area, received a letter from their insurance company in February saying their policy wouldn’t be renewed because the carrier was no longer servicing their area. When their insurance agent shopped for an alternative, the cheapest one she could find had a $9,644 annual premium—an 85% increase over their most recent premium of $5,205.