State should keep Citizens controlBy Steve Estes
Even with the state Legislature not in session, the stupidity just keeps on coming, either from the Legislature, or from our Governor.
Now it seems that Gov. Rick Scott may have on his mind the idea of selling Citizens Property Insurance Corp, the state-run insurer of last resort, to a private company so he can get the state out of the property insurance business.
We have to ask at this point….did Scott ever reside in Florida prior to buying the Governor’s mansion?
The reason Florida has Citizens is that no privately-backed wind hazard insurance provider was willing to stay in the state once they had to start paying claims after storms instead of just collecting billions in premiums with no payouts.
And most of the companies didn’t even bother to pay the claims before the insurers high-tailed it out of the state with billions in policy holders’ dollars in their pockets and wrecked, even though fully-insured, homes in their wake.
The state Legislature, with a much more sound mind than now exists in state government, decided that a not-for-profit insurer, that couldn’t run away when the threat of paying a claim arose, was the only way folks in Florida could get windstorm insurance.
Thus was Citizens Insurance founded.
Originally chartered just to provide windstorm insurance, the company later, by Legislative act, was allowed to offer other lines of insurance that private providers would not. That includes sinkhole insurance.
And it’s sinkhole insurance that is causing Citizens’ current woes, and the sinkhole problem is being caused primarily by interior counties rather than coastal counties.
Sinkhole insurance is cheap in coastal counties because they don’t have the problem. Windstorm insurance is expensive in coastal counties because they have the exposure.
But there have been no windstorm payouts in many years while sinkhole claims have risen dramatically.
So we agree to sell Citizens to a private company that is driven solely by profits to the shareholders, the rates for all insurance rise to the point where only the uber-rich can afford them, and we are back where we started those many years ago.
And rest assured that any private insurer who gets hit with an Andrew-type storm will simply file bankruptcy and pull out—again—leaving the state’s property owners holding the proverbial bag—again.
And again, the taxpayer will wind up footing the bill anyway, as they will do if Citizens gets hit with major windstorm payouts.
The difference will be that Florida’s homeowners will get paid for their damages if the state keeps control and probably won’t get paid for their damages if a private company takes over the risk.
How can we say that?
History speaks for itself.
The argument made by Fair Insurance Rates for Monroe (FIRM) has never held more true.
FIRM argues that actuarially sound rates, for each region in the state, will actually put Citizens on a better footing than it is today and lessen the state’s overall risk.
Solid building codes, which we have in Monroe County, decrease Citizens’ risks. Hardening of the target, which we do in Monroe County, decreases Citizens’ risks.
But interior counties have no incentive to do those things because windstorm insurance is cheap.
If our Governor is the businessman he portends to be, and not just a shyster who got rich off the government teat, as many believe, then putting Citizens on a solid footing and enhancing the situation for Florida residents should be simple.
Selling the insurer might be simple.
It’s not good for Florida.