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Insurance companies run the world

 What will kill the California and Florida real estate market: insurance.

Already, no national insurance company will insure homes in California, State Farm the last one quit a few weeks ago and is no longer writing new policies.  The same for Florida where hurricanes, fraud and government interference is almost certain to ensure that the last national insurance company will leave the market before the end of 2023.  Nature is to blame as is fraud, Florida accounts for nearly 70% of all insurance lawsuits in the US but only 7% of the market in terms of premiums.  But the real killer here are the hurricane. 80% of hurricanes hit Florida.  The last one cost the insurance industry $62 billion.  That’s a lot of premiums, if insurance companies cannot make money in a market they leave. Right now the US government offers homeowners insurance, but after the latest debt limit increase negotiations it has seen its budget cut by 90%  it too will have to stop offering insurance in California and Florida.  The GOP is certainly happy that there will be less big government programs!

Florida legislators have passed new laws to make claim refusal harder and have the inspector general audit claims procedures.  The only outcome here:  getting out!

It’s always the same thing is the quiet boring dude in the back corner of the dark room that runs the shoe.  Never underestimate the insurance broker he and his cohorts run the world.

As for China, it is entirely dependent on others to insure freedom of the sea, although it has the largest navy in the world, it is almost entirely a costal navy.  Like Germany it assumes that others will insure their global market security!  That seems idiotic now!


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