News Currents

Article

Fla. gubernatorial candidates offer property insurance proposals

If he is elected governor, Democratic gubernatorial candidate Jim Davis says Florida homeowners would see lower property insurance rates as soon as next year and a guarantee of at least partial coverage by the state.

Davis proposed creating a $20 billion Hurricane Premium Protection Fund that would pay homeowners up to $500,000 for storm losses, leaving private insurers to cover only the remainder of damages.

The fund, created by partial premiums, would continue to grow during seasons with few storms, and would roll over into the following year, allowing the state to increase coverage.

The plan would also force insurance companies to pass on their savings to homeowners through rate decreases, Davis said.

“It makes the cost for the insurance companies less expensive and it forces them to pass along the savings to us,” Davis said. “It protects our premiums for the future … These insurance companies have charged us outlandish prices, telling us because the storms are coming. Well, the storms have not come … but are we going to get our money back? Of course not.”

Davis’s plan is similar to one proposed by his Democratic gubernatorial primary challenger, state Sen. Rod Smith. Davis spokesman Josh Earnest said his plan differs from Smith’s in that it would force insurers to pass on savings to homeowners, and would also provide more initial coverage. It also caps the state payout at $20 billion.

Sam Miller, a spokesman for the Florida Insurance Council, said he hadn’t yet reviewed Davis’s plan. “If there are savings to pass along, we have to pass them along under the law,” Miller said. “What I don’t know is does it produce savings. It may or it may not.”

Miller also wondered, even given the state’s initial payment of up to $500,000 to homeowners, how private insurers could afford the payments for damage to multimillion-dollar homes.

“Maybe the numbers will work, maybe they won’t,” Miller said.

Davis also plans to phase out Citizens Property Insurance Corp., the state insurer of last resort.

The campaign for Charlie Crist, the Republican nominee, commended Davis for entering the debate. “We’re glad Jim Davis is finally contributing to the debate on making property insurance more affordable for Floridians who are struggling to make ends meet,” said a Crist spokeswoman.

Both Crist and Davis support a national catastrophe fund. Crist has also pledged to force national insurers to stop setting up separate companies in Florida. He said he would also require any company selling auto policies to also offer property insurance. “If they are going to be here for that good stuff, which is fine, then they ought to be here for the tough stuff, too, and offer more alternatives, more choice and greater competition for Floridians,” Crist said.

His plan includes requiring insurers to provide inspections so homeowners know what they can do to decrease damage from storms, and forcing insurers to provide funds for living expenses in advance of their checks for overall damage.