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Florida Confronts Costs of Insurance
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)
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Some insurers have proposed big price cuts, others have not.
According to state statistics, after initial filings, the cost of about one-third of insurance policies rose on average by 12 percent.
One of the state's largest companies, Allstate Floridian, for example, said rates would drop by 14 percent after the legislation. But within a few months, the company filed an amendment saying rates would rise by 42 percent, state records show.
Deb Clouser, a company spokeswoman, attributed the increase to the continued high cost of reinsurance.
"Enhancing the catastrophe fund was a step in the right direction and we absolutely support that," she said. "The problem that we have in Florida is hurricanes and we have to figure out how to [provide insurance] affordably."
No one disagrees with that.
The question is, who will bear the costs of living in hurricane-prone Florida?
While insurance companies maintain that their rates are a fair estimate of the risk, Crist and others say too much of the burden has been placed on homeowners.
Crist said last week that it is a "mystery" why rates did not come down more after the legislation and that he is looking forward to getting some answers.
"For too long, the industry has profiteered on the backs of our people," he said.
