Letter to the Editor – SPT
July 26, 2011
By: Donlad D. Brown
(The July 19, 2011 St. Petersburg Times editorial “Taking Citizens private is no answer” to which this LTE is a response can be found at: http://www.tampabay.com/opinion/editorials/article1181156.ece)
This editorial rejecting the idea of privatizing parts of Citizens Property Insurance Corp. failed to address the flawed state policies that helped create the property insurance mess we’re in today.
Remember that in 2007, then-Gov. Charlie Crist and his supporters in the Legislature — including state Sen. Mike Fasano, R-New Port Richey, a constant critic of private insurers — passed a bill that froze insurance rates and put state-run Citizens in direct competition with the private property insurance market. Citizens unfairly retained such competitive advantages as the ability to assess almost all other types of insurance policies (including auto policies) to make up for the cheaper rates it charges its customers on the front end.
The harmful results are still being felt. Today, Citizens is the largest insurer in the state with 1.4 million policies and is growing by 5,000 to 7,000 new policies a week, the private market continues to shrink, and all Floridians face massive state assessments on their insurance policies if a hurricane hits and Citizens runs out of money to pay its claims.
State lawmakers have had four legislative sessions to reverse this ill-conceived socialization of Florida’s property insurance market and to help restore the private market. But they have only taken baby steps to do so, meanwhile squandering a period of relatively calm weather.
No one wants to pay higher property insurance rates. But homeowners should pay their fair share based on the true risk of their homes. One group of Floridians should not have to subsidize homeowners’ rates for another, and the state should foster true competition among private insurers that leads to market-based rates.
Donald D. Brown, senior fellow, Heartland Institute, DeFuniak Springs
http://www.tampabay.com/opinion/letters/article1182370.ece
