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A few years ago I spent some months consulting on a large FL based residential insurance agency’s order creation processes. By the end, I was floored by how mu
by jwsteigerwalt 1y ago
A few years ago I spent some months consulting on a large FL based residential insurance agency’s order creation processes. By the end, I was floored by how much Citizens (FL’s last resort insurance) and federal backed flood insurance distort the natural balance of the risk/expense/exposure market. As long as the true cost of the risk associated with a given property is suppressed, moral hazard will prevail.
- prasadjoglekar 1y agoWhile true, this is the devil's bargain we have struck in 2008. Big banks betting on RMBSs got a bailout and removed the moral hazard there. People with mortgages rightfully revolted and this FEMA scheme is one of the ways in which money is being filed out. It all needs to be unwound. How, is unclear.
- xrd 1y agoFascinating to hear it put this way. If Trump were to rail against FEMA because it was a money laundering scheme for coastal property owners, he might have wider support, but would lose support of Floridians who want that money laundering. It feels like everyone is winking and grinning straight to the bank.
- quickthrowman 1y agoAgreed, eventually the time will come to pay the piper and home values in coastal Florida will collapse. Probably better if that happens gradually instead of all at once, but the one-shot scenario seems more likely, another Hurricane Andrew level storm would do it.