Hurricane Season, Property Insurance & Property Taxes - Top 3 Takeaways - May 31st, 2022
- The streak stops today. You might say that today is the beginning of the end of an unwanted offseason streak that’s hopefully a sign of what’s to come this year. It’s been seven straight seasons with a total of nine named storms which have literally been on our radar before the start of the Atlantic hurricane season. While tomorrow marks the official start of the 2022 hurricane season, and the Pacific’s is already well underway with Agatha making landfall and all, our streak stops today. Today marks the end of seven consecutive years of hurricane season starting...before the start of hurricane season. You have to go back to 2014 to find the last year we didn’t have at least one named storm prior to June 1st. And yes, it’s possible, perhaps likely, we won’t have to wait long before having one – with Agatha’s remnants potentially leading to our first named storm of the season in the Gulf by the end of the week, but it’s nice that the streak will stop today. Fewer storms mean fewer opportunities for impact. Given that the tropics tend to be trendy, we’d all be thrilled to have a repeat of that 2014 hurricane season. If you don’t remember it, there’s a good reason. Not much happened. Eight named storms and no US landfalls. It was one of the most benign seasons on record. Notably, despite the well below normal activity that season, NOAA forecasters called for a “normal” season that year – with the lowest end of their probability range for named storms turning out to be reality. If history were to repeat itself, this season would turn out to be normal as opposed to being above average. Given the start to the season we’ve now seen, the odds of that being the case have necessarily improved. And yes, as so often you’ll hear people say it just takes one, but here’s the thing. The fewer of them there are the fewer chance there are of there being...“the one”. So, the streak stops today and here’s to hoping history repeats itself – should that be the case there won’t be “the one” for anyone this year. And that’s especially important given Florida’s...
- Property insurance crisis. Many have wondered what the real impact will be of last week’s Florida property insurance reform stemming from the Special Legislation Session. The answer won’t fully be known for about 18 months according to the sponsor of the bill. That’s because reforms passed now only take effect for future policies underwritten and the roof issues and litigation issues being gamed in the system today didn’t just happen yesterday. What that means is that at a minimum for Floridians to begin to get a break on property insurance rates, we need the insurers to catch a break in the meantime. The entire property insurance market is connected, so whether a hurricane hits the Panhandle or Providence we pay the price in our future property insurance premiums in South Florida. Given that we need a year-and-a half for what happened to be fully realized in Florida’s property insurance market, we could really use a benign hurricane season to aid the market’s recovery. It’s been three straight years of net losses for Florida’s property insurers which has led us to this crisis. We could use another 18 months without significant claims to allow the meaningful, though somewhat marginal, reforms to work. And speaking of rising costs to maintain our homes, what’s rising faster, than inflation? South Florida’s property prices, which will lead to record high...
- Property taxes this fall. It shouldn’t come as any surprise to see double-digit increases in property assessed value in South Florida stemming from what happened last year, but for non-homesteaded property owners you’ll need to be ready for a double-digit increase in your property taxes this year. The first phase-reporting of 2021’s property tax assessments are in for Broward and Palm Beach County and the survey says...maximum property tax increases are coming. The average estimated property value increase – about 10% in Broward and nearly 14% in Palm Beach County. What this means for South Florida’s homeowners, you can expect paying 3% more if you’re homesteaded and you’re not – meaning second homeowners and businesses owners can expect to pay 10% more come November – the highest allowable annual increase under state law. There are exceptions, but they are exceptions, only six of the 76 different taxing authorities in Palm Beach County saw increases below 10% - with none lower than 5%. Now of course local taxing authorities could, and generally should, reduce mileage rates to help offset the increases in property taxes – few ever do. So, it’ll likely be record revenue for local governments and record property taxes for you.
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