So headlines are now screaming: "Citizens' policy rates could skyrocket" and "County property insurance rates could triple." That would be Manatee County.
Who didn't see this coming? Apparently, lawmakers.
In the debate about remaking Citizens Property Insurance Inc., the state's so-called insurer of last resort, legislators had been focusing on avoiding catastrophic "hurricane taxes" -- $9 billion worth should $100 billion in damages occur -- by introducing "rate adequacy." That's corporate-speak for jacking up premiums so the company can become "actuarially sound."
So insurance bills could soar by 60 percent in some places. Like the Tampa Bay region. Manatee County.
Consternation now abounds, particularly among legislators who be up for re-election in 2014. So is Gov. Rick Scott. That would be the year rates soar, should this legislation pass both chambers and receive the governor's signature.
But Florida has escaped a hurricane hit for a record seven years. And the doom-and-gloom focus on raising premiums to cover a once-a-century storm or two monster hurricanes boggles the mind. Citizens currently holds enough money -- a record $6 billion -- to pay damages for a once-a-half-century hurricane. Why would the state cripple property owners with massive rate increases, likely forcing some to simply abandon Florida as too expensive?
But wait. By design, Citizens has been shedding policies and thus reducing the risk that Floridians would be forced to bail out the company with dreaded "hurricane taxes." So why the dire outlook?
Thanks to the private insurance industry crying wolf, legislators bought into the exaggerated apocalyptic warnings. The industry stands to benefit handsomely from more and more Citizens customers being dumped into the private market.
This week Senate Bill 1770 passed its final committee hurdle and heads to the floor. The House measure remains under review.
As we predicted in mid-February, this is now a political showdown. Consumers and the cost of living vs. private industry and profits. Voters and taxpayers vs. special interests and campaign contributions.
This calls for a modest approach to Citizens reform, not the sledge hammer now hanging over the company's policyholders.