As a very young man, I remember getting a phone call from mom (then a bank VP) telling me to get my butt out of the house and get some money in my account because I was about to be overdrawn. The point is, I learned from a very young age to watch my expenses and know how much I could afford. When funding a home, for instance, it always makes sense to try to figure not only what your current payments will be but to also adjust for things getting more expensive—such as taxes and insurance. That last one, it turns out, was an expense apparently no one in South Florida can figure out these days.
As my career was winding down, my wife and I knew our new abode was going to have to be smaller and whole lot less expensive than our previous homes. We took into account my new salary and future earning potential and bought a very modest 900-square-foot home in old Hollywood. It was not in a great neighborhood, but it was near our friends and a short bicycle ride to the beach.
We, of course, had to settle with Citizens Insurance, as there simply was no other carrier in our area. In fact, I had been with Geico while living in Ohio for seven years and wanted to continue our relationship, even at a higher cost. But I was told they, like most other major carriers, weren’t insuring in our area at any cost. We had an inspection before purchasing and got a rate we could afford with the mortgage and taxes, and then settled in.
A little over a year after our purchase, we started seeing some shenanigans Citizens was pulling on their customers. This was just after Gov. Rick Scott said he wanted to purge Citizens’ rolls. At the time, I pleaded with Scott via email to reconsider this stance as it would cause a whole new tsunami of foreclosures from people just like us, unable to afford massive rate increases. My concerns fell on deaf ears.
It’s not that I don’t appreciate what the governor is trying to do. It does seem somewhat ridiculous, though, as you hear of someone in the Midwest who has rebuilt a home three times due to tornadoes, or a Californian who has lost multiple homes over the years to fires or earthquakes, and yet they can somehow get affordable insurance. You would think there should be some way to get the insurance industry to revamp its way of doing business. It would seem the governor may not have my interests at heart, but rather, the profits of the insurance industry.
So, we like many others, had a new inspection. The fellow doing the work took a lot of pictures. When finished I asked how we did, and he assured us we were fine. He said most of the problems were homes without hurricane straps, and we were good.
A few months later we were informed that our rate would more than double— considering what I was reading, that was no big surprise. There was no reason though, other than after further review from the inspection, we were underpaying. More recently, another notice came indicating that Citizens would be raising rates again. They called it the “normal” yearly cost increases just for the pleasure of doing business with them. We’re no longer in our financial comfort zone.
Fearing an exploding fiscal situation, I looked for insurance elsewhere—as our esteemed governor suggested. Guess what? There still isn’t anybody reputable in our area, at any price. Sure there are a couple of mom and pop suppliers, but they may not be able to cover their clients in the case of Andrew 2, and they’re much more expensive.
At this point, we do with even less as we continue to make payments where the bulk is going towards escrow to cover insurance. My wife has picked up a second job to cover a few extra nonessentials and unanticipated expenses.
I still live in fear of yet another rate hike. I fear our quality of life will continue to drastically diminish. I fear many others will find South Florida simply unaffordable. I fear as our home continues to submerge below the price we paid for it. And I fear a call from another loan officer someday telling me I better get my butt out of my home, as the bank now owns it.
Bill Andrews his wife, Star, both work at Nova Southeastern University in the Health Professions Division Library. He calls Hollywood home and has been a resident of South Florida for most of his life.