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Government needs standards to deal with home policies

The proposal to allocate $1.4-billion from the state budget surplus to cure the deficits of Citizens Property Insurance Corp., rather than by increasing premiums and surcharges against homeowners insurance policies, would provide some interim relief to those beleaguered homeowners. However, we will soon be confronted with the challenges of yet another hurricane season, and - although it is difficult to predict because of the vagaries and capriciousness of hurricanes - if past history is any indication, these deficits, rather than being transitory, will become a perennial occurrence.

Casualty losses engendered by hurricanes and, to some extent, sinkhole activity have apparently reached a scale at which the feasibility of underwriting these risks is no longer tenable in the free market insurance sector. In Florida, high-density residential and commercial development of the barrier islands and coastal plains, together with the platting of subdivisions on ground that is sinkhole sensitive, necessitates a strategic plan to deal with these natural phenomena including real estate development and construction standards by which to obviate or at least reduce these losses in the future.

The science and technology of developing and implementing these standards should be of the highest priority to state and local governments. It makes little sense to devote large expenditures of tax money on a recurring basis toward insuring such losses without at least trying to establish statewide standards to lessen their impact.

Nevertheless, there is no fail-safe method by which to develop land and to build structures that will be infallible to hurricanes and sinkholes. At some point, a legislative determination must be made on whether casualty losses that eclipse the amount of premiums charged for insurance coverage have assumed the dimension of being a subject of public safety thereby authorizing the expenditure of tax money to underwrite such protection.

When the debate preceding such a determination is in progress, one of the items to be discussed will be from which tax money this coverage will be financed.

It would seem that a state and local strategic plan would include consideration of:

Whether private sector insurance companies can be constitutionally compelled to underwrite homeowner policies on a concurrent basis with the sale of other policies that may be more lucrative to their investors, and, if so, whether their losses would be of a magnitude that compelling such action would amount to taking private property without due process of law.

A definitive analysis of why the traditional market forces of supply and demand are not workable in the homeowners insurance industry.

The formulation of statewide standards to mitigate hurricane and sinkhole losses.

Whether the underwriting of losses that exceed the grasp of the private marketplace warrants the levy, collection and expenditure of public tax monies as a matter of public safety and welfare.

Insurance bill confusion is frustrating

I received a bill for homeowners insurance for $1,508 due April 4. I sent the check March 21, and it was cashed March 23.

On April 14, the company sent me a check for $1,235, which I have not cashed. I have an insurance bill for $2,025 that is due June 6. These policies are not for flood insurance, only liability and wind, and my wind insurance has a deductible of $4,000.

I spoke to my agent, and he thought the company made a mistake and asked if I had paid twice. No, I did not. I have a copy of the check that the company cashed. Do I need an accountant, a lawyer or another insurance agent to figure this out?

[Last modified April 23, 2006, 00:50:21]