Florida Confronts Costs of Insurance
Despite Legislative Action, Substantial Rate Reductions Have Not Materialized
Florida property owners began to see insurance rates jump after Hurricane Andrew stormed through in 1992. Active hurricane seasons in 2004 and 2005 added to costs associated with disaster coverage, and lawmakers decided to act.
(Associated Press)
TOOLBOX
   Resize
COMMENT
 Discussion Policy
 CLOSE
Comments that include profanity or personal attacks or other inappropriate comments or material will be removed from the site. Additionally, entries that are unsigned or contain "signatures" by someone other than the actual author will be removed. Finally, we will take steps to block users who violate any of our posting standards, terms of use or privacy policies or any other policies governing this site. Please review the full rules governing commentaries and discussions. You are fully responsible for the content that you post.
Who's Blogging  |
Monday, January 21, 2008
MIAMI -- When Gov. Charlie Crist (R) took office a year ago, he quickly turned his attention to Florida's deepening hurricane insurance crisis.
Amid rising complaints that post-Katrina price increases were making the state unaffordable to many families, legislators in a special session approved a law that was supposed to drop the average wind insurance bill by 20 percent or more.
"We have a message for the people of Florida today: Help is on the way," Crist announced in a triumphant signing session.
But a year later, resolution of the state's hurricane insurance crisis seems as elusive as ever.
Last year's legislation saved insurers money because the state assumed billions more of the hurricane risk. But the savings that were supposed to be passed on to consumers have fallen far short of expectations. In fact, some major companies have proposed price increases.
Now with Crist and lawmakers evincing a sense of betrayal, a battle has erupted between the politicians and the industry over what went wrong -- and what Florida should do next about the crush of insurance costs.
In recent weeks, Crist has hired three private lawyers to look into the possibility of a class-action lawsuit against insurers. State regulators subpoenaed records from insurance companies. Insurance Commissioner Kevin McCarty prohibited Allstate from writing new policies until it complies, though that order was suspended Friday by a court ruling. Meanwhile, Florida Senate leaders said they would call for testimony from the executives of leading insurers.
"I would give the insurance industry an "F," a dead "F," because I think they have failed not only what the law requires, I think they have morally failed the people of Florida," Crist said recently.
The new prices, insurers say, reflect the daunting challenges of providing coverage in this hurricane-prone state after billion-dollar disasters such as Katrina, Rita and Wilma. Industry groups insist they never promised a big price cut after the legislation.
They blame politicians. The promised price cut, they suggest, was campaign rhetoric.
"We didn't promise these significant rates decreases -- those aren't our promises," said Sam Miller, executive vice president of the Florida Insurance Council.
Though last year's hurricane season was mild, insurance markets across the Southeast have been roiled in the aftermath of the disastrous seasons of 2004 and 2005.
