It might not be the most spectacular Florida Man story, but it is one of the more concerning ones. In this year of extreme weather events—September was the warmest on record ever—insurance companies are adapting their business models to what is here and will keep coming.
WSJ has used the Floridian town of West Palm Beach as a glaring example. There, the insurance companies are so disinclined to offer home insurance that if your house value is under $1mn—the average home value in Florida is $392,000—your home insurance will cost you as much as your mortgage.
Most mortgage lenders require that borrowers have insurance, but many who have paid out their loans choose (or have) to forgo it. That is obviously a risky decision because what is the worst that can happen keeps getting worse.
One of the local homeowners reasoned that if their uninsured house disappears in a flood or fire, they will just sell the lot and move on, but that begs the question: at what price can they sell, and to where will they move?
Regitze Ladekarl, FRM, is FRG’s Director of Company Intelligence. She has 25-plus years of experience where finance meets technology.