Overlooked Part of Insurance Crisis

This week, Governor Bush took a step to start solving one part of the insurance crisis. This is from a St. Petersburg Times story.

Gov. Jeb Bush said Wednesday that he will ask the state Cabinet next week to consider creating a new statewide pool for businesses that can’t find property insurance.

Bush said he’s intrigued by an idea to resurrect a dormant state law that would create an insurer for business not unlike Citizens Property Insurance Corp., which is geared largely toward the residential market.

Okay. So to have a state-run insurance company as a last resort for businesses is okay. But the governor has said otherwise about home owners policies: “But what we’re not going to do is have the government be the insurer of wind — first resort, middle resort or last resort. Some folks out there would have suggestions that would lead down that path.” (taken from Miami Herald article.)

Hmm. Interesting.

It’s not that I think the Democrat’s propsal is the answer, but its better than anything the Republicans have tried. They propose to use an entity like Citizens to ensure some portion of windstorm coverage – say up to the first $100,000. Private companies would then cover damage over that amount.

Republicans, however, don’t seem to have any real ideas. First, Attorney General Charlie Crist has said that the Democratic idea has some merit. He has not yet come out with his proposal to fix the insurance crisis. The second candiate, Chief Financial Officer Tom Gallagher – who has overseen the insurance first as Insurance Commissioner in the early 1990’s and later as C.F.O. (Both the Hurricane Catastrophe Fund and Citizens were Gallagher ideas) – recently unveiled his proposals: expand Citizens to include businesses, then lower the threshhold for the Catastrophe Fund to cover insurers losses from the current $5.3 billion to $3 billion.

One thing is certain, someting HAS to happen. The Herald’s editorial says it all: Insurance crisis now, calamity tomorrow.

I agree that Bush should not call a special session until there is some agreement on what to do… but if something dire happens and Florida takes another major hit from one or more storms this hurricane season — we might see a revolution brewing among the voters, leading to major upheaval at the ballot box.

About Jim Johnson

Editor and publisher of The State of Sunshine.
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