Florida Insurance

From the NWF daily news online.............

According to state Sen. Alan Hays, R-Umatilla, "The people of Florida need the full truth about the extent of our property insurance dilemma." The dilemma is complicated but it boils down to two problems:

Citizens Property Insurance Corp., a government-backed enterprise, was supposed to be the "insurer of last resort" for high-risk properties. Instead, it has become the largest property insurer in the state, with more than 1.3 million policies in force.

And because Citizens Property is a state-run operation, a major disaster could empty its coffers and stick everyone else with the bill. People who have policies with private companies could see billions of dollars' worth of surcharges on their premiums.

The state's first goal should be to shrink Citizens Property.

Toward that end, the Legislature is considering proposals that would bar Citizens from selling policies to cover new construction or remodeling of existing homes in environmentally sensitive and high-risk coastal areas. The company also would be allowed to raise its residential policyholders' rates by 25 percent.

So far, so good. A smaller Citizens Property likely would reduce the risk for Floridians.

A longer-range goal would be spurring a revival of the private insurance market. "We think Citizens … should no longer compete with the private market when private insurers are willing to write (policies)," Sam Miller, executive vice president of the Florida Insurance Council, told The Associated Press.

The catch, of course, is that private insurers sometimes aren't willing to write policies. That's why Citizens Property was created in the first place.

Legislators have tried before to fix Florida's property insurance mess. Will it work this time? That may depend on 1) the willingness of private insurers to cover some properties they previously wouldn't touch, and 2) the willingness of individuals who own certain high-risk properties to either pay enormous sums for insurance or do without.

The bottom line, as far as we're concerned, is that the state of Florida shouldn't be in the insurance business. It ought to get out.