Frustrated but not surprised about a lack of progress on property insurance issues during an election year, a pair of key legislators on Tuesday began preparing for another push once the dust settles in November.
More than three months after lawmakers failed to make meaningful changes to the state's property insurance landscape, Rep. Bryan Nelson, R-Apopka, and Sen. Garrett Richter, R-Naples, released a three-part position paper they say highlights the hidden risks all insurance policyholders face in the event of a devastating storm.
While the Florida Hurricane Catastrophe Fund and Citizens Property Insurance Corp. are in the best financial shape they have been in years, the pair contend that the programs' relative health masks their vulnerability and the risks to policyholders.
Despite general agreement that Citizens rates are artificially low and the CAT fund remains vulnerable, solutions remain elusive as political leaders grapple with the cold and hard reality of having nearly 1.5 million policyholders relying on the state-backed insurer while millions more rely on the CAT fund for help.
"When you have 60 percent of the state's population living within 10 miles of the coast it is political suicide to do the right thing, which is to force people to pay whatever the premium should be," Nelson said.
As chairmen of their respective chambers' insurance committees, Nelson and Richter are expected to again spearhead industry-backed efforts to return more of the market to private companies and away from state-backed insurance now being offered at below market rates.
Critics, however, maintain that the sky is not falling and lawmakers should be wary of such claims. The odds of a major storm or series of storms breaking the bank are very long
"These are more ridiculous scare tactics coming straight from the insurance rate hike dream team," said Sean Shaw, a former Florida insurance consumer advocate whose law firm now represents homeowners.
Nelson and Richter released a series of opinion pieces Tuesday outlining their case that hidden behind artificially low premiums is the possibility that policyholders of all stripes will be hit with assessments if Citizens and the CAT fund fall short.
While attempts can be made to raise premiums for existing Citizens customers, Nelson said it will be difficult to wean policyholders from the plan. Lawmakers are more likely to modify assessments and consider ways to make it more difficult to become a Citizens policyholder in the first place.
"If we keep people from getting into (Citizens), it won't seem like such a great deal," Nelson said.
Both sides throw out numbers to justify their positions. In their opinion piece, Nelson and Richter state that a storm costing Citizens more than $13 billion could lead to assessments that could nearly double premiums for Citizens policyholders in the year after a storm.
But critics including Shaw say the odds of that happening are about one in 100 while raising rates too high will have its own consequences as the state tries to rebound economically.
"If we listen to the rate hike dream team, we have a 100 percent chance of ruining our delicate housing recovery," Shaw said in a statement.
