As a Florida contractor, I continue to be concerned about the future of our economy. Yes, we are red hot right now in almost every market in Florida, and developers, home-builders, and realtors are making plenty of money. But Florida’s real estate market has always been on a boom-and-bust cycle, and factors come into play that can create nervousness for us veterans when we see the market overheat.
One of the issues that is beginning to rear its ugly head again is the rising cost and availability of insurance for homes and investment properties. There a number of reasons for that, but one of the main ones is Florida’s free-wheeling litigation system. That system continues to be impacted by outdated laws and loopholes. As many attorneys are able to sue for bad faith without any kind of constraints or guidelines on what bad faith is, insurance companies will cover for that lack of predictability with higher costs for insurance. Essentially, the formula goes something like this: the easier it is for someone to sue without guidelines for an outcome equals higher insurance costs for everyone.
Why does this concern me or anyone else in the real estate industry?
Simple. Interest rates are at an all-time low. But with property insurance rates now moving to an all-time high with the prospect of going even higher, we may tank our own market long before we need to. We need our legislature to act.
Sam Elliott Construction
Submitted July 28, 2021
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