[upthesaukee]

Insurance covers the losses of a "few" by the "many".

Back in the 1980s and 1990s, I worked for an insurance company branch office in Upstate NY that had branches nationwide.

In August of 1992, category 5 hurricane Andrew hit the Bahamas, Florida, and then continued through the Gulf of Mexico to Louisiana. My company had a branch office in Melbourne FL with around 90% of their business in the area around Miami and just south of Miami, including Homestead FL. The damage was catastrophic.

In the end, the losses incurred were outweighed tremendously by the cost to repair and replace, even with the reinsurance (catastrophic loss insurance) that we had. The end result was that the branches nationwide could not cover the damages incurred in FL and the resulting premium increases made the cost of our insurance totally uncompetitive. In the end, our company went out of business.

The point is that our homeowner rates increase not only because of the cost to repair covered losses, but also what has to be repaired due to uncovered losses, not the least of which is flood damage. Couple this with the severe weather we have seen over the past few years due to wind damage, snow and ice damage, etc. and the rates have been increased dramatically. Combined with the cost of materials and labor, the rates must be increased to keep pace.

Dave