The 3 Bright Sides Coming in Florida Insurance

James Orchard Halliwell-Phillips wasn’t respected much by both places I have resided. Chicagoans and Floridians didn’t care for the Shakespeare Nursey Rhymer! Either that or their parents didn’t read to them when they were little. How else can you explain all the early shoddy construction in both places? And this is why we have had high insurance prices in Florida. I’ll explain.

See Halliwell-Phillips wrote the 3 Little Pigs in 1842. Everyone (other than Chicagoan’s and Florida Man) knows that both Fiddler Pig and Fifer Pig were kinda slow. They were cute and preferred to roll around in mud. Why else build homes out of straw and sticks? It wasn’t until Practical Pig came along that building codes finally changed with his brick construction that protected against the big wind gusts of the Big Bad Wolf. So, you’d think those pigs being the Guinea Pigs would have taught everyone the way!

In Chicago, Mrs. O’Leary’s cow knocks over a lantern and the whole place burns down. Sticks! Early Florida Man used conch shells and sticks and straws. Hurricanes blew those away. See, if only we read our nursery rhymes.

For Floridians who are angry about insurance rates, not studying these wise fables is partly to blame but there is great news on the horizon. I’ve been on locally on CBS, NBC, FOX and NBC, but it’s always cool when a national news outlet does an in depth interview……Watch The Interview and I’ll go over the 3 reasons why Florida insurance should come down over the long run.

Going back to the Midwest, Chicagoans got their act together and started building with bricks after the Great Chicago Fire in 1871. They even have a brick named after the city. The Chicago Brick.

Floridians though were slower to come around, hence the Florida Man. Homes made of twigs, clay, conch or wood were what earlier settlers built. It looks nice and earlier northern builders who came down to build in Florida brought their style with them. Better to look good than to feel good as Fernando Lamas used to say. The problem is that just like the 3 little pigs the big bad wolf hurricane eventually blew the weaker construction down.

Hurricane Andrew changed all that. More stringent construction guidelines were placed. In 1998, regulations for new homes having hurricane protection came into play. Most homes built after 2007 now have impact glass. Older homes are being retrofitted with impact glass and better roofing structures.

Last year, I witnessed the devastation of Fort Myers when we delivered PB&J sandwiches. You can see some of it here. Homes and storefronts especially by the water and highest winds were horribly destroyed. Lives were turned upside down and the rebuilding is still going on. Whenever these storms hit various areas be it Fort Myers or the Big Bend region, homes are being built back stronger! Power lines get buried underground. It’s been over 30 years since Andrew. It may take another 20 years more, but the ability to withstand strong hurricanes eventually takes on the same story as the little pigs that built a house out of bricks. Or in this case full concrete! The house doesn’t blow down. There will still be damage from storms, but our infrastructure will withstand it far better. Every area previously destroyed is just built back to withstand the next wolf storm.

The 2^nd sunny side of things is condos will learn from the lessons of Surfside. I wrote last year wrote an article titled Condo Chaos – Condo Calm and subsequently about new legislation that went into effect. By the end of the 2024, condos at risk will have had proper reserves put into place and be required to fix any weak points. That will shore up insurance issues.

The third bright spot has nothing to do with storms but rather insurance legal reforms. Multiple insurance people have told me this is 80% or more of the problem. We were all too piggy in seeking out loopholes with frivolous lawsuits. Big insurance companies just appear less human. When we needed a roof for our home both my neighbor and I got numerous calls from roofers we never heard of saying they could find a way to get us a free roof. We both knew that was not morally wrong. We both paid for our roofs like we should have. However when everyone starts getting a free roof, it makes it “seem” acceptable. Plus, the money just arrives. You aren’t suing a fellow human. Much of this is on us. In an odd twist the insurance companies needed company protection from the consumer.

The great news is much of that problem is fixed. Bill 2A did not go into effect until the spring of this year. Furthermore, there were approximately 100,000 lawsuits filed I heard from 2 insurance sources. The backlog of those cases will take approximately 18-24 months to work its way through the system. Once it does and insurance companies see that good old capitalism will let them make a profit, the plan is they will come roaring back. That along with so much better single-family home and condo infrastructure should make it much tougher for that Big Bad Wolf to blow the house down.

I know in Chicago though; the Windy City wasn’t named for the gusts off the lakefront. Rather it was because the politicians were such a bag of wind. If only there were a nursery rhyme to help us all with that!

Jeff Lichtenstein, originally from Chicago, got his start in the home furnishings textile business where he traveled over 35 weeks a year selling fabrics. After the family business was sold, Jeff moved to Florida and became a real estate agent. Today he is the owner and broker of Echo Fine Properties, a luxury residential brokerage voted best brokerage of the year. Jeff manages a non-traditional model of real estate that mimics a traditional business model. Echo has 80 agents, an average of one million dollars per transaction and over 500 million in annual sales. Between traveling for work and annual family trips to national parks with his wife and 2 now adult children, Jeff has visited 49 states. He is also one of the few Chicago White Sox fans you’ll ever meet. Some publications he has been quoted in.

Author of business & leadership book How Making a Sandwich Can Change Your World – The Amazing Success of the PB&J Strategy – Available to Buy Now!

Feel free to ask him a question directly at [email protected] including a complementary valuation of your home.

Posted in Finance, Jeff's Journal, Real Estate Tips on September 23, 2023 at 6:29 am.

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The 3 Bright Sides Coming in Florida Insurance