Florida Insurance Rant - An Update

James A Graves, Jr.

April 2009


In 2008 I wrote my mortgage holder (Chase) to ask why I should pay for national flood insurance.

Their reply, “If coverage is not maintained by you, your lender may obtain it at your expense.”

I saw no need to reply to that decision, but Chase wrote and asked why I had not responded.


This is my answer…


April 14, 2009


Dear Ms. (name removed),


I am writing in response to your correspondence dated March 13, 2009, in which you requested a response to your letter dated January 20, 2009.


I didn’t respond to your January letter because I wasn’t aware anything of substance came after “No”.

Because “No” is essentially the summation of the statement from your January letter, “If coverage is not maintained by you (that would be me), the lender (that would be you) may obtain this coverage at your (my) expense.”


Unfortunately, considering mandatory FEMA flood insurance increased 215% from 2007 to 2008, it is already at “my expense”.


Mandatory FEMA flood insurance decreased a whopping 5% for 2009, but not to worry, homeowner’s insurance compensated by increasing 8.02%


That brings the total homeowner’s insurance increase from 2004 to 2009 to 289.4%


These insurance rate increases are nothing more than legalized extortion.  As homeowner’s with a mortgage we are forced to pay these obscene premiums because the insurance companies have the financial and political clout to do as they please.


And the most infuriating aspect of this situation is that FEMA, a part of our own government, is gouging homeowners like us with total impunity just to replenish the billions pissed away on the Katrina fiasco. 


Those at FEMA charged with evaluating our potential for flooding are fully aware that our home is built on pilings for the specific purpose of avoiding flood damage.  Placing us within this flood zone was intentional.  The odds of floodwater damage to our home that would require compensation from mandatory FEMA flood insurance is so astronomically high that FEMA’s profit from our mandatory FEMA flood insurance premium is virtually guaranteed to be 100%.


Note to reader:  In my earlier correspondence with Chase, I explained the following:

“The storm surge from Hurricane Ivan did not reach the ground floor of our home, or get into my    shop or the boat shed. Our house is elevated 9 feet above the ground on 15 bridge pilings, making the   first occupied floor 21 feet above mean sea level. Our property is 1000 feet from East Bay, 12 feet above mean sea level and 12 miles from the Gulf of Mexico.

If a storm hits our area large enough to produce a storm surge in excess of 21 feet above mean sea level, 12 miles from the Gulf, reaching the second floor of our home, almost every structure in this area will be destroyed, far exceeding the damages caused by Hurricane Ivan, or any other storm in history. The odds of that event are far greater than winning the lottery.”


At the present annual rate of $6120, our mortgage will be paid in full in 24 years. 

During the ensuing years from 2009 to 2033 we will have paid $146,880.

And that might actually approximate what our home will be worth by 2033.


At the present annual rate of $1250, by 2033 mandatory FEMA flood insurance will have cost us $30,000.  We will have nothing to show for it but the loss of $30,000 plus the interest we could have earned by investing that money. 

That will have been $30,000 paid to protect against the astronomically unlikely event that our home is destroyed by a catastrophic flood that will have also destroyed most of the homes and buildings on the entire Emerald Coast from Mobile, AL to Panama City, FL.


At the present annual rate of $4537, by 2033 homeowners insurance will have cost us $108,888.


These insurance cost figures are only estimates, of course, and inaccurate, because premiums will continue to increase.  But, in the unlikely event that I’m still the owner in 2033, you can bet that mandatory FEMA flood insurance payments will cease when the mortgage is paid off. 

However, I’m not stupid; I must continue to pay homeowners insurance.


But, from 2009 to 2033, I will have paid $146,880 toward the purchase of my home and $138,888 for insurance.


Since when is insurance supposed to cost the equivalent of the value of the insured property?


Simply multiply my figures by the thousands of homes along the Florida coast and try to imagine how much money is being coerced from homeowners and into the pockets of FEMA and Florida insurance companies.


Ms. (name removed), I know that you are doing your best to achieve Chase’s goal of the highest level of quality service, but that must be a daunting task considering that, seeking to protect investments, Chase Home Finance has become nothing less than complicit in the legalized extortion being perpetrated on countless homeowners in Florida and within FEMA’s flood zones by FEMA and the insurance companies.


I plan to retire in 2012.  Until then I must pay these obscene insurance rates.  I obviously have no choice.  But I refuse to allow my lifestyle and future to be dictated by corporate and governmental greed.  FEMA and the insurance companies in Florida have placed us and many other homeowners in an almost untenable situation of owning property that is literally unmarketable, not because the values have been artificially inflated, but because FEMA and the insurance companies in Florida are conducting business with the same ethics as an inner-city loan shark.


However, in the event that we homeowners can no longer afford to feed the loan sharks, the only one left to feed them will be the mortgage holder.  And that would be you.



I am most sincerely,

James A Graves, Jr.


©2009 James A Graves, Jr.


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