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What voters want is policy on insurers

Of all the crises in Florida, none can make candidates squirm more than being asked about homeowners insurance.

Published August 10, 2006

His wife is a public school teacher, his daughter is about to start prekindergarten. And he is an academic adviser at the University of South Florida.

But as he campaigns for a state Senate seat, Rep. Charlie Justice, D-St. Petersburg, isn't finding much interest in the education issues he loves and that have galvanized Florida voters for nearly a decade.

"What I spend my days talking about ... is the thing that is strangling our pocketbooks ... homeowners insurance," Justice recently told the Democratic group Democracy for America, when it met in Tampa. He got a round of applause.

Across Florida, rising frustration over high insurance premiums has taken center stage just four weeks before the primary election. In races up and down the ballot, voters are asking and candidates are answering, as best they can, hard questions about a crisis that reaches beyond income level or party affiliation.

What's remarkable about the insurance crisis as a political issue is that it may be too complicated for the campaign trail, or maybe even the voting booth. Dig deep into nearly any candidate's insurance reform plan and none offers near-term relief for property owners. Ask candidates to guarantee lower insurance rates, and they decline.

"The problem with the insurance solution is it takes too long to explain in a campaign setting," said Senate President Tom Lee, R-Valrico, who is running for state chief financial officer, a Cabinet-level post that involves some oversight of insurance matters.

His opponent in the GOP primary, Rep. Randy Johnson of Celebration, has tried to make insurance a featured issue in the race, contending that Lee went too easy on insurance companies when the Legislature made changes in insurance law last spring. So far, Lee is still leading in the polls.

"You need to show voters you have a grasp of the issue and everyone (in the governor's race) has met that threshold so far," said Tom Eldon, vice president of polling firm Schroth and Associates. Eldon predicted that candidate proposals won't be vetted by voters unless they are highlighted in upcoming televised debates.

Steve Schale, a political strategist for the Florida Democratic Party, put it more bluntly: "I don't think voters care what the plan is, just that there is a plan (to fix insurance)," said Schale. "It's like 1998 when Jeb Bush became governor. People didn't necessarily like his education plan, but they thought anything had to be better than what we had."

* * *

In some ways, Debbe Kelley is not the typical voter; she is a devoted Democrat who has done volunteer work for the party. But in one important way she is a typical Florida homeowner.

Just on Friday, she signed up to pay Citizens Property Insurance Corp. $4,300 for a one-year policy on her home in the Pelican Island neighborhood of Tampa. And she was relieved to do it. Kelley, 50, an engineer, said her previous insurance company wanted to raise her annual premium from $3,800 to $9,300.

"I'm just appalled that an insurance company is allowed to make this kind of an increase," she said.

So how will she vote?

Unclear. Kelley said she still needs to study the platforms of Democrats Jim Davis and Rod Smith to determine which has the better stand on insurance. She would like to see tighter state regulation of premium increases, and a change in the law that allows national insurance companies to have Florida subsidiaries that send profits out of state while keeping losses within Florida.

For months, though, that second big issue on Kelley's list has only received attention from one gubernatorial candidate: Republican Tom Gallagher. This week, his primary opponent, Charlie Crist, began saying the practice should be stopped. Gallagher has said he's not sure that's possible now, without causing a mass exodus from Florida's market.

In the late 1990s, then-Insurance Commissioner Bill Nelson allowed the Florida-only subsidiaries. The result: Insurers wall off their liabilities in the Sunshine State to protect parent company assets. That leaves less in reserves to pay Florida claims and a smaller premium base to spread the risk.

"That is something that never should have been done," Gallagher lamented last week on the campaign trail. "It's left us insuring ourselves. But I don't know how you put the genie back in the bottle."

For months, political strategists have suggested it would be insurance, and his long ties to Florida's market, that would sink Gallagher's bid for governor. The chief financial officer, twice before Florida's elected insurance commissioner, built this career in part on the solutions he pushed through in the wake of Hurricane Andrew.

For sure, Gallagher is polling far behind Crist, the state's attorney general. But it's not clear how much insurance is weighing down a candidate who has suffered months of bad publicity over a long-ago divorce and allegations he violated state ethics laws when he bought stock in companies he regulated.

On the stump, Gallagher uses several minutes in every speech to explain how the global reinsurance market - where insurance companies go for back-stop insurance of their own - is raising rates in the wake of 2004 and 2005 hurricanes. And how that is driving up premiums.

Gallagher recommends expanding the state's own reinsurance program, the Catastrophe Fund, which provides cheaper coverage for insurance companies. He argues that would help attract more private retail insurers, which would increase competition and, ideally, eliminate the need for Citizens, the state-backed insurer of last resort.

It's dry stuff and not an easy sell. He doesn't promise lower rates.

"He made some excellent points but he still hasn't convinced me on insurance," said Robin Lankford of Odessa, after hearing Gallagher speak at last month's meeting of the Hillsborough Republican Executive Committee. She's planning to vote for Crist.

Other candidates don't guarantee lower rates, either.

Democratic gubernatorial candidate Rod Smith has proposed a state pool to insure up to the first $100,000 of risk on any Florida home, but has provided no estimates of the average premium costs. Critics, however, have pointed out that under such a plan, the state pool could end up paying the majority of hurricane claims. State insurance officials have said that in 2004 and 2005, more than 80 percent of individual hurricane claims were below $100,000.

Smith's primary opponent, Jim Davis, has proposed stricter regulation and a consumer advocate, but hasn't spelled out how that would lower costs.

Crist has proposed forcing insurers who write Florida auto policies to also write homeowners policies if they do so in other states, an idea that has been rejected by most state politicians as unconstitutional.

"There is no magic wand," said Republican Gov. Jeb Bush, whose administration created a citizen task force to look into insurance.

Which may explain why Chris Kowalczyk isn't a highly courted constituent by any major political candidate. His nascent Port Richey group, Homeowners Against Citizens Florida, has gathered more than 12,000 signatures imploring Florida's politicians to take action.

The group wants rates for Citizens customers to be rolled back. "People have seen 300 to 400 percent increases, it's just outrageous," said Kowalczyk.

No major candidate has endorsed the idea. Kowalczyk, the group's vice president, said he can't get an appointment with Bush and hasn't had much luck with the major gubernatorial candidates.

Muses Gallagher, "This is complicated stuff and it's hard to explain it; and the bottom line is, they don't want to hear it. They want to hear we can make insurance affordable and I don't blame them."

Staff writers Curtis Krueger, Adam C. Smith and Alisa Ulferts contributed to this report.


What would candidates do?

What do gubernatorial hopefuls think about the insurance crisis? We asked. Their answers are on 6A

You dump me, I'll dump you

More consumers are starting to pull their car insurance away from companies that refuse to cover their homes. 1D

Policies pile onto Citizens

The "insurer of last resort" now holds a third of the market. The company meets today to discuss its budget for the coming year. 1D


Share your views on the insurance crisis at


Tom Gallagher is behind in the polls, but will he get out of the race? As some Republican insiders write him off, others defend him. 7A


Recent premium increases, by statewide average, for Florida's top five homeowners insurance companies.

Citizens Property Insurance

State Farm 52%
Allstate 50%
Nationwide 71%*
Liberty Mutual 25%*
* requested

[Last modified August 10, 2006, 13:49:55]

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