Florida has failed to insure its residents' homes properly, and it needs to allow insurance companies to raise their rates, said a coalition of House representatives and others Thursday.
Florida received an F on a 50-state Insurance Report Card issued by the nonprofit Heartland Institute, a think tank concentrating on the free market.
Florida has Americas worst insurance environment, said Neil Lehrer, director of The Heartland Institutes Center on Risk, Regulation and Markets. The state ties with New York at the bottom of the institute's rankings.
In a press conference with Rep. Alan Hays, R-Umatilla, Rep. Janet Long, D-Seminole, Rep. Kevin Rader, D-Delray Beach, and others, he said the state should loosen insurance rates to offer Floridians a broader choice in their health insurance.
The Heartland Institute looked at 11 categories that shaped Floridas property and casualty insurance programs and found the politicization of Floridas insurance regulation and Floridas regulatory environment to be particularly bad. The institute only released a brief, preliminary report Thursday.
The news came a day after Gov. Charlie Crist vowed to veto any rise in insurance rates and the state announced that Miami-based Northern Capital Insurance Company had become insolvent.
It also follows a Florida TaxWatch report from earlier this week that said the state-run Citizens Property Insurance Corp. could face a major shortfall if the state is hit by a severe hurricane. The Florida Hurricane Catastrophe Fund would have a $7.2 billion shortfall.
Reliance on the public programs is unfeasible, said the gathered group.
Our government has taken on billions of dollars of risk that we cannot afford, Long said.
Hays and others urged the support of HB 447, which would allow unregulated insurers to gradually raise their rates over three years to as much as 15 percent.
Hays repeated his call from Wednesday for the state to investigate property insurance rates and allow unregulated companies to raise rates until they are actuarially sound.
Hays said that the higher property insurance rates may be painful to Florida homeowners at first, but rates will eventually go down once insurers find themselves on solid ground -- at least in Central Florida. The people living by the Gulf of Mexico or Atlantic Ocean must make peace with the fact that their rates might never be reduced, he said.
Contact Alex Tiegen at atiegen@sunshinestatenews.com, or (561) 329-5389.
