SunSentinel.com
By Antonio Fins
October 11, 2011
So, I was feeling pretty good about Florida – so far – escaping unscathed from a hurricane for the sixth straight season.
Then the insurance industry analysts showed up for an editorial board meeting at the Sun Sentinel. The gist of the hour and 45 minute discussion: Even with our good luck, we’re still out of luck on getting legislative reforms to straighten out the morass of a private insurance market left by Hurricanes Charley through Wilma in the middle of the last decade.
For example:
Citizens Property Insurance Corp. keeps growing because large firms – ahem, State Farm – keep dumping policies. And the start-up competitors, which we’ve hung our hats on as saviors, can do no more than simply soak up a fraction of the policies the not-so-Good Neighbor is unloading.
Oh, it gets worse. As Citizens grows, its exposure – and the exposure of all Florida policyholders – grows too. So, a storm season with, say, $20 billion in losses, would trigger more than $1 billion worth of extra assessments on Citizens’ customers.
Don’t laugh if you are not a Citizens customer. Persons insured by other companies can be socked with more than $5.5 billion in assessments.
Nice.
So, here’s an idea I floated some time ago – during the 2006 elections for Florida Chief Financial Officer, to be precise. Change Florida law so that the only requirement in hurricane coverage is for the structure of your home, not its contents. Contents would require a separate policy.
Do that and premiums would drop.
Now, the insurance people we met with today say that’s already getting into practice. Maybe so, but changing the law to force a separation would make this difference more prevalent.
And it would force Citizens – which isn’t separating coverages – to do so too.
Antonio Fins is the Sun Sentinel’s editorial page editor. He can be reached at either afins@sun-sentinel.com, (954) 356-4669 or you can follow him on Twitter @opinefins
