Local governments have obvious incentives to encourage building, but the state of Florida itself does subsidize flood and hurricane insurance.

If you own a house or building in Florida and have a mortgage, you're required to carry it. Here's how a policy gets priced:

You go to a retail broker with your info. They pass it to a wholesaler, who puts the submission out into the market for quotes. Any carrier or MGA that wants the business prices the CAT and AOP (non-CAT) portions separately. Actuaries build models for the AOP side, while Verisk and Moody's model the CAT portion. Those two numbers get added together, plus some fees — and that's your annual premium.

From there, the insurers buy reinsurance on their portfolios. The reinsurers run those same models, do their magic, and come up with their own price.

Just an example, because no major hurricanes have hit the south east in a while, premiums are down 30% right now. All of the insurance companies are getting squeezed.