Taking a Bit of a Break from the Latest Lunacy by Talking About ... Florida?

by Neil H. Buchanan

Almost exactly a year ago, I wrote a column here on Dorf on Law that I described as a "mental health break."  Even though that column ended up veering into tragic territory that was anything but a break from the news (the mass murder dominating the headlines at that time being the one in Uvalde, which has been followed by literally hundreds more since then), the main focus of that column was the utterly banal topic of homeowners insurance.  Click-bait extraordinaire.

In any event, I explained that I needed a mental health break because of "the ongoing wave of unrelentingly horrifying news on all fronts."  That has certainly not improved in the year since, and this year has the added un-fun of the debt ceiling crisis to keep me biting my fingernails and dealing with uninformed reporters.  Therefore, when my new homeowner's insurance bill arrived in the mail, I was almost grateful that it contained a surprise that justifies a followup to last year's column.

But today’s column is not ultimately about insurance. In the end, it implicates decades of bad governance by conservative politicians who claim to believe in "free" markets -- although we have recently learned that there is an exception when the largest employer in your state makes a public statement that an ambitious governor dislikes.  What is happening here in Florida is a leading example of what happens to a state that experiences decades of a corrupt political culture, spanning the decades before and after segregationist Southern Democrats became Republicans.

To put it differently, most of the news coming out of Florida in the last few years has been in some sense unprecedented, with an emerging wave of Trumpian authoritarianism and aggressive repression leading to dictatorial attacks on Democratic politicians, the state's universities, local control of schools, and so on.  We should remember, however, that in fact the deep rot has been here all along, in some states even worse than in Florida -- hello, Texas!  Confronting that fundamental problem might help us to understand how the new wave of reactionaries is building on that rotten history.

OK, so we might as well get the mind-numbing part of the story out of the way.  Last year, I used my own insurance renewal notice to illustrate the shocking spikes in the cost of homeowners insurance in the Sunshine State.  I accepted an offer to join the University of Florida's law faculty early in 2019, and shortly thereafter I bought my house in Gainesville.  My annual premia have been as follows: 2019 - $1260.00; 2020 - $1426.00; 2021 - $1972.67; 2022 - $2661.00.  The annual rates of increase were thus 13.2 percent, 38.3 percent, and 34.9 percent, with the price more than doubling from 2019 to 2022, an aggregate increase of 111.2 percent.

As I pointed out at the time, the insurance companies were aggressively promoting the idea that Florida's greedy lawyers were the problem, even going so far as to send customers links to petitions to ask the state legislature to enact "property insurance reform."  (It did not occur to anyone that the state's lawyers were neither more nor less greedy in 2019 than in 2022, but why let logic dictate legislation?)  Well, the state legislature did just that, holding a very special session last summer specifically for the purpose of kneecapping people who might actually win lawsuits against the insurance companies that try to avoid paying out on claims.

As I noted in a followup column last June, the state legislature did pass a package of changes to insurance law, completely freezing the Democratic minorities in both houses out of the process.  The result?

Based on literally no expert testimony -- with even the state's insurance commissioner not weighing in, even though he was in the room where the Republicans were holding their proceedings -- the Republicans put on a band-aid that even they admitted might not have any impact for up to eighteen months.  Essentially, they threw money at the immediate problem, providing two billion dollars to subsidize insurers' losses, with the money available only if the insurers reduce homeowners' insurance rates (by how much?  enforced by whom?).

How should I assess this in light of my 2023 insurance renewal premium of $4369.53 -- an increase of $1708.53 from last year, or 64.2 percent, and with my premium now 3.5 times higher than it was four years ago?  The Republicans did say that it might take until the end of this year for us to see any impact, but should we have expected to see the annual rate of increase leap from ridiculous to insane?  Were the losses in this state over the last year worse than the previous year or the year before?  And we should not forget that the legislation put a limit on attorneys' fees, which were supposedly the driving force behind all of this.

What is happening in the rest of the country?  I know a person with a house in Maryland whose homeowner's premium did jump this year -- from $989 to $1093, on a house that is similar to mine in Gainesville.  That is an increase of 10.5 percent, which surely is unwelcome but is only four percentage points above overall inflation in the past year.  It is true that Maryland is afflicted with fewer weather disasters than Florida endures, but that has always been true.  Even so, more than a handful of insurance companies no longer write policies in this state, so something unique is going on.

As it happens, an economist named Benjamin Keys, who specializes in these issues, wrote an excellent op-ed last Sunday about the nationwide problem of homeowners insurance inflation.  He noted that average premia nationwide rose at a rate of 12 percent from 2021 to 2022 (the year in which my premium rose by 34.9 percent).  Keys also noted that insurers have recently become much more aggressive about putting a price on the implications of climate change, because billion-dollar-plus events have becoming depressingly familiar, not only hurricanes but massive wildfires, tornadoes, snowstorms, and so on, across the country and around the world.

The central point of Keys's column is that even people who are not living in the most disaster-prone areas are paying the price of climate change, which includes not just Floridians like me who live in the safer central-northern part of the state but everyone around the country.  The financial links across the insurance sector guarantee that pricing is less localized than one might think, and even people who are living in mostly-safe areas are not sheltered from the increase in prices.  Keys put it this way: "Right now, those of us who elect to live in safer communities are quietly subsidizing those who do not."

Keys also points out that the recent pricing decisions are built to account for the likely future intensification of disasters, so even people who think they are only in it for the short term will feel the effects, through both their insurance premia and the resale prices of their houses.  He also notes that climate-related harms are "disproportionately borne by lower-income groups and racial minorities, who may already live in riskier areas, are less likely to be insured, and may lack access to resources for pre-disaster preparation or post-disaster repairs."

The overall picture, then, is bad from every angle.  Even so, it is important to get back to the point that I made at the beginning of this column: Some states have given insurers free rein for decades, with little or no regulation or even minimal oversight.  And as the block quote above noted, Florida's legislators as recently as last year simply ignored their own state's insurance commissioner, making it clear how powerless the nominal regulator of the insurance companies is.

Despite its very recent (and very temporary) status as a swing state, and despite the presence of so many relocated northerners in South Florida, this is still a southern state in all of the bad ways that we have seen throughout the country's history.  There is a saying among Floridians about their state: The further North you go, the further South it feels.  Or as one of my research assistants put it the other day: "I think of northern Florida as an extension of southern Georgia."  A former governor here who became a US senator was a leader of the "massive resistance" movement against Brown v. Board, also fighting against both the Civil Rights Act and the Voting Rights Act.  (His name is on the building where my office is located.)

The point is that the political system here has always been overly influenced by the legacy of Florida's having joined the secessionist states during the Civil War, continuing through the Jim Crow era and beyond.  The growth of the state in the early 20th century was driven in large measure by robber barons who made sure that the backward state government never matured into a force that might take governance of their cash grabs seriously.  The state's legislature continues to do the bidding of entrenched big money interests -- with the notable exception of a mouse-logo'ed global company that happens to be the biggest employer in the state.  But again, that is the enormous exception to the rule.

This is a state that will uniquely suffer from the acceleration of climate change.  It is thus especially tragic that the political culture here never even tried to shake free of its rotten roots.