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Home insurance companies are leaving Florida because it's not profitable to operate in an area with so much vulnerability to hurricane damage. Also, the only t

by gmd63 3y ago

Home insurance companies are leaving Florida because it's not profitable to operate in an area with so much vulnerability to hurricane damage. Also, the only thing stopping medical insurers from denying coverage or increasing prices for people with pre-existing conditions is the Affordable Care Act.

t0mas88 3y ago
There is an important additional factor, regulators are setting limits on rates / rate increases. Florida is not profitable with those limits. If the insurance companies are free to set any rate, they would happily cover a high hurricane risk area. You can get insurance on very risky things. The way it's done is high rates and "reinsurance" which means the insurance company shares the risk (and premium) with a pool of other insurance companies. For policies with a large possible payout (e.g. a big ship or aircraft) this is always done, to avoid issues for the insurance company that gets unlucky enough to have to pay out.
- gmd63 3y ago
  Well apparently it's not hurricanes or regulation against accurate pricing, it's rampant fraud fueled by a state supreme court decision to incentivize winning cases for policyholders https://www.iii.org/press-release/triple-i-extreme-fraud-and-litigation-causing-floridas-homeowners-insurance-markets-demise-062322 https://www.iii.org/press-release/triple-i-extreme-fraud-and... "Florida, however, is the site of 79 percent of all homeowners insurance lawsuits over claims filed nationwide while Florida’s insurers receive only 9 percent of all U.S. homeowners insurance claims, according to the Florida governor’s Office."
imgabe 3y ago
The whole point of insurance is that there is a relatively low probability of a relatively high expense event happening. In all likelihood, the thing won't happen to you, but if we all pool our money together and you are the unlucky person then you're covered. A pre-existing condition is not a low probability event. It is a 100% certainty that you have to pay for it. In that case the insurance is just a middleman who is increasing the cost of the thing you definitely have to pay for. You pay the insurance company, they take a cut, and they pay the healthcare provider. Why not just pay the healthcare provider directly?
- gmd63 3y ago
  I imagine insurers are working very hard to identify which low probability events are likely going to happen for specific people. They might be doing detailed continual examinations of their homes for example.

by gmd63 3y ago

t0mas88 3y ago

There is an important additional factor, regulators are setting limits on rates / rate increases. Florida is not profitable with those limits. If the insurance companies are free to set any rate, they would happily cover a high hurricane risk area. You can get insurance on very risky things. The way it's done is high rates and "reinsurance" which means the insurance company shares the risk (and premium) with a pool of other insurance companies. For policies with a large possible payout (e.g. a big ship or aircraft) this is always done, to avoid issues for the insurance company that gets unlucky enough to have to pay out.

gmd63 3y ago
Well apparently it's not hurricanes or regulation against accurate pricing, it's rampant fraud fueled by a state supreme court decision to incentivize winning cases for policyholders https://www.iii.org/press-release/triple-i-extreme-fraud-and-litigation-causing-floridas-homeowners-insurance-markets-demise-062322 https://www.iii.org/press-release/triple-i-extreme-fraud-and... "Florida, however, is the site of 79 percent of all homeowners insurance lawsuits over claims filed nationwide while Florida’s insurers receive only 9 percent of all U.S. homeowners insurance claims, according to the Florida governor’s Office."

imgabe 3y ago

The whole point of insurance is that there is a relatively low probability of a relatively high expense event happening. In all likelihood, the thing won't happen to you, but if we all pool our money together and you are the unlucky person then you're covered. A pre-existing condition is not a low probability event. It is a 100% certainty that you have to pay for it. In that case the insurance is just a middleman who is increasing the cost of the thing you definitely have to pay for. You pay the insurance company, they take a cut, and they pay the healthcare provider. Why not just pay the healthcare provider directly?

gmd63 3y ago
I imagine insurers are working very hard to identify which low probability events are likely going to happen for specific people. They might be doing detailed continual examinations of their homes for example.