My crystal ball cracked and until it gets repaired, I cannot predict the future. Baseball Hall of Fame member Yogi Berra said it best, “It’s tough to make predictions especially about the future.” Keep these on your radar.
Insurance brokerage Willis, Towers, Watson forecasts commercial property insurance premiums could rise by as much as 25 percent in areas hit by the Hurricanes Harvey, Irma, or Maria. While the storms spared Northwest Florida areas not affected but in catastrophe-prone areas could see 15 to 20 percent hikes as well. Even property outside hurricane danger zones should expect increases next year, the brokers warn.
American International Group lost over $3 billion in the third quarter of 2017 and expects to seek double-digit increases for next year. Hurricanes Irma and Maria logged over $135 billion in insured losses. Earthquakes in Mexico along with devastating California fires could cost billions more as well.
Bottom line, Florida homeowners will likely face insurance price hikes. While the prospect of higher insurance premiums does not excite me, it beats rebuilding after a storm. Your glass can be half full or half empty, make the call.
When you walk and bike a lot, you find out how many people text and drive. This foolish practice drives up auto insurance rates. Willis, Towers, Watson cites higher accident numbers due to distracted drivers as the primary cause. According to the brokers, auto insurance premiums should rise between 3 and 8 percent next year. Paying more for self-inflicted mishaps bothers me more than acts of nature. Unlike most pensions, Social Security payments increase by a cost of living adjustment (COLA). The Social Security Administration recently announced a 2 percent COLA for 2018. However, indications are the adjustment could be wiped out by a quirk in how Medicare works. Social Security deducts Medicare Part B premiums from payments. By law, the bulk of Medicare recipients (adjusted gross income $85,000 single, $170,000 couples) are “held-harmless” from higher Medicare costs in years with little or no Social Security COLAs. Medicare premiums are expected to stay at $134 for 2018; the “held-harmless” proviso meant most enrollees only paid $109 in 2017 even though costs rose to $134 monthly. The 2 percent COLA neuters the “held-harmless” clause thus many beneficiaries won’t receive larger checks. Instead, they will pay the higher monthly premium in 2018 they avoided last year.
The initial tax proposal rushing through Congress eliminates the mortgage interest deduction on second homes, grandfathered for existing homes. While many buyers pay cash for second homes, most don’t. Eliminating the second home mortgage interest deduction could tamp down demand for SoWal real estate. I can’t see this working out well for local real estate, but my crystal ball is in the shop.
You can’t always get what you want, but Buz Livingston, CFP can help figure out what you need. For specific recommendations, visit livingstonfinancial.net or come by the office in Redfish Village, 2050 Scenic 30A, M-1 Suite 230.