You raise the rates on everyone to cover actual expected losses, and make sure that the insurance companies don't commit fraud.
Then people will say that they can't afford Florida. And they will be correct.
Then people will say that they can't afford Florida. And they will be correct.
It's rhetorical, since we see in this post's article what happens. But my point is that something like this was more-or-less inevitable.
[1]: https://www.flgov.com/eog/news/press/2025/governor-ron-desan...
[2]: https://www.floridapeninsula.com/blog/florida-legislation-he...
With Florida climate risk accelerating, the new admin telling states FEMA is unnecessary, and ~15-20% of Florida homeowners going without property insurance due to cost, this will manifest in an unfortunate but entirely expected outcome: catastrophic economic loss at some point in the future with no recourse for the majority impacted (citizen homeowners and GSE investors alike).
Same thing that's happening in CA. Insurers pull out of the state and non-renew policies.
I'm sure it was satisfying to see the regulator stick it to the insurance companies, but you can't force them to write policies if they don't think it's worth it.
https://www.wptv.com/money/real-estate-news/9-new-insurers-f...
Eventually, property values would be drastically reduced and home insurance would be more per year than the mortgage. If it’s 80% mortgage 20% insurance premiums now, maybe it will flip to something like 35%/65% mortgage/insurance with property values halved (or more). I’m ignoring the fact that the replacement cost of a home has little to do with the property value since most of that value is in the land, but the land would also be worth less. Regardless, a shitload of mortgages would be underwater, impacting both lenders and borrowers on a massive scale. Vast amounts of wealth would be destroyed.
Or, property values remain the same and the poor have to leave Florida. This assumes there are enough people that can move to Florida and pay the same for a property with doubled or tripled insurance premiums, which is probably less likely than the first scenario I laid out.
It's not so much that the mortgages are underwater. It's that the houses are.