Will the Insurance “Crisis” Kill the Republican Party

In the past couple of weeks there have been quite a few stories about homeowners insurance. They were disturbing enough individually, but taken together they spell trouble:

Tampa Tribune:
Citizens’ Not Happy To Be No. 1
TAMPA – It’s just 3 1/2 years old and was supposed to stay modest in size. On Saturday, however, Citizen’s Property Insurance Corp., the state-sponsored insurer of last resort, will surpass State Farm to become Florida’s largest insurer.

More than 1.2 million policyholders will be covered by Citizens on July 1, almost twice as many as were covered when Citizens first started writing policies in 2003.

Ft. Myers News-Press
We may pay for Katrina damage
La., Miss. losses could jack Fla. flood insurance

Hurricane Katrina’s effect on the nation’s flood insurance program won’t be felt in Mississippi and Louisiana, where the storm did the most damage.

The impact will be in Florida, where the lion’s share of the National Flood Insurance Program’s policies are in force.

More than 2 million home and business owners in the Sunshine State could pay higher flood insurance premiums and have subsidies for older homes, businesses and vacation properties eliminated if Congress enacts many of the proposals being floated to fix the financially shaky flood program.

St. Petersburg Times:
Another insurer asks for huge hike
Nationwide, which already has stopped writing new policies in Florida, wants to raise its rates 71.4 percent in anticipation of hurricanes.

Nationwide Insurance Co.’s Florida unit is asking state regulators today for an average 71.4-percent rate hike for homeowners coverage, joining a flood of insurers seeking double-digit increases in the face of an expected busy hurricane season.

The request, if approved by the Florida Office of Insurance Regulation, would be effective Nov. 10. Public hearings, which are required on all rate hikes of more than 15 percent, will be scheduled.

The rate increase would affect all of Nationwide’s 240,000 Florida policyholders and comes on the heels of a 21 percent average rate hike last July. Last August, Nationwide said it wouldn’t renew 25,000 homeowners policies and 4,800 mobile home policies. It has stopped writing new policies in Florida.

Ft. Myers News-Press
State Farm: 79% rate jump won’t do
Insurer will seek more as Nationwide seeks 71 percent increase

TALLAHASSEE — The Florida arm of State Farm has withdrawn a request for a 79 percent rate hike in homeowners’ insurance rates — telling regulators that won’t be high enough.

That announcement came Thursday as Nationwide Insurance filed for a statewide average 71 percent increase in home insurance rates.

State Farm’s announcement said the company’s costs have risen significantly since the original request was made in May.

Lakeland Ledger:
Insurance Is ‘A Mess’ for Officials, Too

LAKELAND — Homeowners aren’t the only ones afraid to open the mail these days. Property insurance premiums have more than doubled for the Polk County School Board and local governments are seeing similar jumps.

“It’s a mess,” said Mike Kushner, risk management director for Polk County.

Kushner, who is a candidate for a statewide insurance task force, says Florida’s insurance crisis has gotten so bad that he is getting calls from private businesses asking for advice.

Sarasota Herald-Tribune:
Insurance rate hikes force more to go ‘bare’

Like many Florida homeowners, Bernard Davis expected his property insurance rate would jump after the past two hurricane seasons.

But the 77-year-old, disabled Korean War veteran was wholly unprepared when St. Petersburg-based United Property and Casualty Insurance Co. refused to renew the $887-a-year policy on his simple Brooksdale Drive home in Sarasota.

“I expected them to raise the rates, but did not expect them to cancel the policy,” said Davis, who lives miles from the water and has never filed a claim with United.

When his coverage expires in August, Davis is reluctantly considering joining a growing number of Florida residents who are going “bare” — without insurance. Some pinched commercial landlords — seeing big increases in their deductible percentages — are likewise doing without.

They might represent the extreme, but as Florida’s property insurance crisis hits new lows, homeowners and business people are considering — and sometimes being forced into — alternatives that they would have considered unthinkable just a few months ago.

Some business people are considering forming their own cooperative insurance companies or looking to shift their holdings out of state.

Many are facing the prospect of passing along at least a portion of their new insurance burden to customers.

Even governments have not been immune.

The state of Florida is the largest insurance company in the state…
Floridians’ flood insurance could go up because of Katrina…
Natiowide needs 71% increase…
State Farm’s 79% increase is not enough…
Governments are having problems with insurance too…
People and businesses going without insurance, during an active hurricane season…

And that is just about one week’s worth of news.

With all of this news coming at the beginning of hurricane season – what did the Republican legislature do this Spring to help? They bailed out Citizen’s – which was in debt from 2004 and 2005 payouts. The bailout came in the form of tax dollars from the budget surplus, as well as an assessment on everyone’s home owner’s insurance (basically a TAX on your insurance policy).

The Republican’s solution to raising rates? Raising rates even more.

Representative Rubio and Senator Pruitt, along with all Republican candidates for governor and the cabinet, need to wake up and realize that this issue could be enough to give Democrats the push they need to have a big win this fall.

About Jim Johnson

Editor and publisher of The State of Sunshine.
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