SunSentinel.com
by Don Brown
August 29, 2011
While we’ve dodged a bullet with Hurricane Irene, today Florida is in a precarious position. Despite the fact the state’s largest insurer is financially unsound, most believe we will be able to repair the damage from the next storm and rebuild our communities as we’ve done before. Unfortunately, that is not the case, and instead what Floridians will be forced to deal with is a financial burden beyond imagination.
Estimates suggest Citizens Property Insurance Corp. will have a $5.7 billion surplus by the end of 2011, with the potential to recover $6.591 billion in Florida Hurricane Catastrophe Fund reimbursements and $0.575 billion in private reinsurance to pay storm claims. However, with a total exposure of about $465 billion and the 100-year probable maximum loss estimated at $22 billion, all Floridians will be required to repay the loans for the amounts needed in excess of what Citizens has available. This debt will be paid for through hurricane taxes tacked on to the insurance policies of working families, business owners, charities and renters.
For those fortunate enough to own multimillion-dollar beachfront property as a first home or vacation home, it’s unreasonable they receive subsidized insurance via Citizens at the expense of hardworking Floridians.
As lawmakers work to put our state on a path to financial stability, we need those individuals who choose to live on Florida’s coast to take responsibility for their actions. Reforming the state-run entities and encouraging the return of the private market will help alleviate the financial pressures Citizens policyholders are being faced with today and the potential financial calamity the entire state will face in the wake of the next major storm.
Don Brown is senior fellow with The Heartland Institute, a former member of the Florida Legislature and chairman of the House Insurance Committee.
http://www.sun-sentinel.com/news/opinion/fl-property-insurance-forum-20110829,0,7109130.story
