Stix ‘n Brix

Between a rock and a hard place. That’s where just about everyone is when it comes to property insurance. Insurers, drained by huge claims from the storms of the past two years and faced with skyrocketing reinsurance costs, are either pulling out of the state or raising premiums to stratospheric levels. Politicians are faced with the problem of how to keep the state’s insurer of last resort alive without decimating the budget. Property owners are faced with the certainty of huge rate increases.

It would be nice if there was a quick fix, but there simply isn’t. This problem has been years in the making. Contributing factors: Unprecedented growth, especially along the coasts and in South Florida, set the stage; The real estate boom drove up building (and repair) costs; and Regulation, which has kept premiums depressed and turned a blind eye to the fact that this is a state where weather catastrophes are as certain as the sunrise.

The problem will eventually be resolved, but the solutions will hurt everyone. Higher premiums will raise mortgage payments, which will depress home values, which will slow the increase in tax revenues. Eventually the forces will come into some sort of balance again. With any luck, the lessons learned will be long remembered.