The for-profit insurance companies started exiting the state around 2010 Bob; it makes sense since they were losing money in the state.
The video is more about the state-run non-profit insurance replacement (i.e.,
Citizens Insurance) and changes to it last year.
The premiums under Florida's state program are determined by risk (FEMA's
FIRMs maps) and the value of the home. So, your desire that those at higher risk pay higher premiums seems fairly well handled. There's also a cap of $700,000, but there's a special exception of $1M for homes in Miami (guess you know where the politicians live ; -). The whole program is based on the state
wanting to provide the safety-net to keep people from
fleeing the state. It's probably why about ~20 different states have similar programs now.
While I originally wasn't a fan of the state-run insurance concept, the non-profit model did seem to work because the costs were shared by the policy holders and unlike a normal insurance company if the costs were higher than the premiums they apply a surcharge (that is the risk was shared by citizens and provided the equivalent of liquidity and reserve). For over a decade the original fears of government not knowing how to manage such a business were unfounded as the checks and balances seemed to work.
What I don't understand is the changes from last year. Well, I get the desire for the state to not be in the insurance business. But it's not like the reputable insurance companies with good cash reserves are clamoring to come back, they know they can't make money. So why would the state:
- Authorize insurance companies to cherry pick policy offerings to the lowest-risk areas as it increases costs for the state-insurance
- Allow companies with very little liquidity or reserves to offer insurance as a disaster will bankrupt them and leave the state hanging.
- Make it harder for home owners to get insurance companies to pay up for claims. For example, insurance companies will no longer be ordered to pay attorney fees even if they improperly denied the claim (ref).
- Make it hard to get regular home-owner's insurance without wind & flood insurance (supposedly it can be done via special authorization).
We've never made a claim and were pretty shocked by our insurance costs this year. I get
with climate change the costs are increasing drastically. It's something we're discussing as we'll have to move or forego insurance. Base Insurance costs ~5% the value of your house yearly, there are costly deductibles, and you might not be able to get them to pay up anyway, perhaps it's better to just bank the premiums or harden the property? That won't work for those buying with a bank loan of course as they require wind insurance here to get the loan.
Ultimately I guess the question is what, if any, should governments role be in protecting the homes of the citizens that reside there and making the area a desirable place to work & live? I get states want to keep citizens and historically have done all sorts of things to attract them, but do extraordinarily risky places to live require extraordinary measures? What do you think?