Efforts to expand the role of the state-backed insurer of last resort will encourage ill-advised investments by homeowners.
Florida’s home insurance market has long been a mess. With private property insurance getting scarcer and more expensive, some members of the legislature are pushing for an even greater role for the state. Unfortunately, that would only encourage homeowners to make ill-advised investments at a time of intensifying and more frequent climate-linked catastrophes. The state should take a step back — not forward.
Florida’s business model, of course, is built on real estate. As long as net migration trends are positive and the assessed value of homes keeps rising, tax revenue will rise and the state will be happy to implicitly underwrite all kinds of risks. But if residents leave and newcomers are deterred because of the high cost of property insurance, then the entire economic and fiscal edifice will collapse.
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