Politicians are gambling on Florida's weather
Published: Wednesday, January 31, 2007 at 6:01 a.m.
Last Modified: Wednesday, January 31, 2007 at 2:18 a.m.
Gov. Charlie Crist, during his election campaign, continually spoke about reducing the property insurance rates in Florida. This past week the Legislature passed and the governor signed changes to the insurance laws, and they are all walking around patting themselves on the back. Is it a time for celebration or a time to beware?
The major changes made were to Citizens Insurance and the way the state-run company will operate in the future. After the 2004 and 2005 hurricane seasons, Citizens had a deficit of $2.2 billion. The company collected far less premiums than it needed to pay in losses. Guess who paid to make up that deficit? That's right, me, you and every other insurance policyholder in the state.
By law, Citizens was meant to insure only high-risk properties that could not find coverage elsewhere, its rates had to be higher than those charged by private insurers. Under the new legislation, Citizens rates will be rolled back and the requirement that the government-supported insurer's rates must be higher than market-based rates will be repealed. Each homeowner in the state already pays into the state catastrophe fund as an assessment on their policy through a normal company.
If we have several years with a mild hurricane season, recent changes will make our politicians look like heroes. But if we have a severe hurricane, Citizens will go further in debt, and we will all pay the rising deficit. Our politicians are gambling on the weather.
Congratulations everyone! Do you feel lucky?
William G. Bishop,
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