Insurance: Here's the bat, now swing it!

Please consider this a note of encouragement, but also a polite urging. You’ve got to do something big. Big.

Published December 2, 2006

To: The Legislature and Gov.-elect Charlie Crist
From: Your fan Howard
Re: Hurricane insurance

Y’all have called a special session on Jan. 16 to do something about Florida’s insurance crisis. That’s great. People are crying out.

Please consider this a note of encouragement, but also a polite urging. You’ve got to do something big.

Frankly, if you just pass those piddly little task force recommendations, then you will have let the people of Florida down, and they will know it.

The problem you face is simple. I know that everybody says it’s complicated. But at the root, it’s simple.

The private insurance companies have figured out they’re scared of Florida. It’s too risky.

They know how many people will have car wrecks and house fires. But they can’t know how many people will lose their homes in a storm.

So they have quit selling insurance in Florida, and jacked up rates on what’s left. The state has been forced to create a last-resort outfit to cover what the private sector won’t. Today, one in three Florida homes are in your state pool.

There are only two ways for you to go.

The first way is to get the private companies back. But I mean, you REALLY have to get them back. You can’t just cross your fingers and hope they’ll come.

Have you asked them what it would take?

I bet if you stuck ’em with truth serum and made them confess what’s in their souls, they would tell you: Insure a hurricane in Florida? What, are you nuts?

So sure, fiddle with your building codes.

Give more folks a grant to fix up their homes.

Kick in the state’s “cat” fund a little earlier.

But that isn’t going to get them back. Do that and nothing else, and you’re just kidding yourselves.

Here’s what you should do. Get the insurance guys in under oath. Make them commit to what would bring them back. And then make them sign an enforceable contract to do it.

(By the way, some folks say we should allow the companies to sell policies that don’t cover everything. Doh! Just remember, that means we will be in an even worse jam when a storm does hit.)

Here’s the other way to go.

Spread the risk better and more fairly among Floridians through the public sector.

Cover everybody. Or just windstorm damage. Or every house, up to a limit. Or above a certain level of damage. Something like that.

Do not cry out, “But that’s big government!’’

You’ve already GOT big government, ladies and gentlemen. But you have managed to create the worst possible form of it.

You’re letting the private companies keep all the lowest-risk customers, and dump the worst risk on the public sector. Sheesh!

So, that’s it. Either figure out how to make those insurance guys come back, or else spread the risk more fairly in the public sector.

Please don’t get up there in Tallahassee in January, surrounded by lobbyists and each other, far from home, and talk yourselves into dinky half-measures, then try to tell each other you have done something. It would be a crushing disappointment, and a bad way to start your terms.

Good luck.