R.J. Lehmann on the Florida insurance crisis

Slate – ICLE Editor-in-Chief R.J. Lehmann was quoted by Slate in a story about the impact of Hurricane Ian on Florida’s insurance market. You can read full story here.

R.J. Lehmann, an insurance expert with International Center for Law & Economics who lives in St. Petersburg, told me Florida’s “perilous position” had its roots in the brutal period from 2004 to 2006 when a handful of huge storms caused widespread damage. “In most of the country, you do not find companies that only write homeowners’ insurance. It’s not a very profitable line,” he said. National insurers minimized their exposure, and smaller ones haven’t been able to take the heat…

…Third is that Citizens is repeating, at a state level, the mistake that the National Flood Insurance Program is making nationally: It subsidizes people who build and buy in places that they probably shouldn’t. “The useful role of insurance is that prices convey information about risk. You shouldn’t build somewhere people can’t afford the insurance,” Lehmann said. “Living on barrier islands is probably not a thing we can’t allow anymore. It’s difficult to move people. But at least stop future development.” High premiums send a message: This is not a safe place to live.