Tallahassee politicians must ensure a robust private property insurance market to avoid a financial disaster if a major hurricane or several smaller storms strike the state this summer, former Gov. Jeb Bush said this week.
The two-term governor said it’s critical that a measure similar to one vetoed by Gov. Charlie Crist last June gets passed this time around.
“We have a lot of undercapitalized insurance companies that might not make it through a 2004 or 2005 or … an Andrew (1992) type storm,” said Bush, who was governor when Florida was devastated by eight major hurricanes in 2004 and 2005. “In the worst case scenario, the taxpayers will be liable in some fashion.”
Floridians with property policies, including auto, already pay surcharges on their policies and are liable for whatever the Florida Hurricane Catastrophe Fund or state-backed Citizens Property Insurance couldn’t pay.
Trying to deliver on a campaign promise in 2006, Crist has sought to hold down rate increases by private insurers and loudly criticized State Farm, one of the most highly capitalized and solvent companies in the industry. The Illinois-based insurer, which has dramatically reduced its number of property policies in Florida, was seeking a 47.1 percent rate increase following the two seasons of devastating hurricanes.
Many legislators, however, wanted no part of attempts to force out longtime trusted companies with the ability to pay claims in the wake of a major storm.
The bill vetoed by Crist last summer would have let homeowners pay higher, unregulated rates for insurance covering hurricanes, fires and other hazards from well funded national companies.
“These types of ideas to fortify the insurance market I think are good ideas,” Bush told The Associated Press. “People aren’t required to buy any insurance. But to create alternatives for people it seems to me would be a good thing.”
Crist, who is leaving office after one term to seek the Republican nomination for the U.S. Senate, made an unusual appearance in a Senate committee last week to oppose legislation proposed by Sen. Mike Bennett, R-Bradenton, that would let property insurers offer unregulated rates to homeowners.
David Foy, deputy chief of staff to the governor, said the new bill doesn’t go far enough to satisfy the concerns that led Crist to veto last year’s bill.
“It didn’t fix any of the consumer choice concerns the governor had or give consumers any assurance that their companies are going to stay here in Florida and serve their policyholders,” Foy said.
But the panel approved the measure (SB 876) on a 6-4 vote. The House version (HB 447) is also moving through the committee process.
Bennett and Crist have been at odds about many insurance related issues as well as how the Office of Insurance Regulation does its job.
Bush said he believes Florida legislators have addressed the concerns outlined by Crist in last year’s veto message and he’s hopeful the governor signs it this year.
“The consumer choice bill as its crafted now seems to make sense,” Bush told AP. “I think it would strengthen the private property insurance market. Some degree of a private market over the long haul, I think will create lower rates.”
Bush said he hasn’t talked to Crist directly about the issue.
Topics Florida Legislation Hurricane Property Market
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