Florida Braces for a Storm of Homeowners Insurance Rate Hikes

 

(Bloomberg Businessweek) — Every year since 2010, Florida has gained about 300,000 residents. The consistent stream has become the state’s lifeblood, keeping taxes low while injecting billions into new-home construction and associated businesses. When Covid-19 hit, there was concern the migration would stop.

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The reverse happened. “We’ve never written more [sales] contracts in our 94-year history than we did in June this year,” says Mike Pappas, president of the Keyes Co., a privately held real estate, mortgage, and insurance company based in Miami. “You’re definitely getting, from the Northeast, a surge of people looking for housing.”

Many of these newcomers may not know what they’re getting into. They’ve calculated the cost of their house, their mortgage, their car payments, their property taxes, and their home insurance. What they almost certainly haven’t taken into account is the reinsurance market—where insurance companies go to share risk. The peculiar dynamics

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