Why Home Insurance in Florida Is a Mess

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Odd Lots 45 min 4 speakers 8 chapters transcribed 1 month ago
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What is the current state of Florida’s home‑insurance market after the recent hurricanes?

Unknown 0:01
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Tracy Alloway 0:35
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Unknown 1:06
Podcasts, radio, news.
Tracy Alloway 1:20
Hello and welcome to another episode of the All Thoughts Podcast. I'm Tracy Alloway.
Joe Weisenthal 1:25
And I'm Joe Weisenthal.
Tracy Alloway 1:26
Joe, we need to do more on insurance.
Joe Weisenthal 1:29
Yeah, absolutely. So we are recording this October eighteenth. In the last several weeks, we've had two extraordinary storms. The second one, Milton, that aimed directly at Florida near Tampa Bay, was not as bad as people thought, even a few hours before landfall, which people thought was just gonna be tremendously catastrophic potentially. However, it was obviously still. Still quite damaging. And once again, the question of hurricane risk, storm risk, these certain flood-prone markets, who's going to pay for them, all of these things continues to be a source of, I would say, rising anxiety, regardless of what just happened with these storms.
Tracy Alloway 2:11
Yeah, absolutely. And you've seen estimates flying around for how much this is gonna cost the insurers. But I think there was one that said as much as fifty-five billion from those two storms. So big numbers here. And obviously, people who live in those areas have been talking for a long time about how their insurance premiums are already going up a lot. And certain areas of the country are perhaps becoming unaffordable. Or maybe you can't find insurance for a property on the coast of Florida anymore. Yeah. Or if you do, you have to go to the state insurance body rather than a private entity. And I think just getting really big picture, I find insurance fascinating because it's basically the original finance.
Tracy Alloway 2:49
I find in the first thing. Yes. Yes. Right? Right. It's like the pricing of risk is essentially the very essence of finance. So I find the idea of how. How we're going to be pricing the risk of more and more storms, who's going to bear those costs, absolutely fascinating.
Joe Weisenthal 3:08
Totally. And we know there are structural issues going on in the market and they're myriad and we will get into all of them. But yes, there is much to discuss on this topic on this episode and probably many episodes to come.
Tracy Alloway 3:20
Okay, so in this particular discussion, we're gonna be coming at it from a slightly different angle. We're gonna focus on Florida, what's been happening in the structure of that market, and what else could be done. And yes, I promise listeners, there will be discussion about Florida roof insurance frauds and all of that, because there are some interesting things happening there as well. So I'm very happy to say we do, in fact, have the perfect guest. We're gonna be speaking with With Jerry Theodoro. He is the policy director of finance, insurance, and trade over at R Street Institute, which describes itself as a free market think tank. He has written a lot about the Florida insurance market. So, Jerry, thank you so much for coming on OutLots.
Jerry Theodorou 4:02
Thank you, Tracy. Thank you, Joe. It's a pleasure to be here.
Tracy Alloway 4:04
So maybe give us your background just to start, because you've been in the insurance world for a while.
Jerry Theodorou 4:11
Yeah, thanks. I began my career as a commercial underwriter at Chubb and Sun and after a couple of years moved over to AIG. AIG shipped me over to Europe and I worked in Paris and Frankfurt and the Middle East for about ten years as an expatriate.

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