They're all fired up to do ... something

By HOWARD TROXLER, Times Columnist
Published January 17, 2007

TALLAHASSEE - This is weird. For once, there are more citizens than lobbyists around the Capitol in this week's special session of our Legislature.

The Legislature is all fired up to do something about Florida's hurricane insurance mess, even if the insurance companies don't like it.

The insurance lobbyists, as a result, seem shell-shocked. They hang around committee meetings listlessly.

Occasionally one of them stands up to protest weakly into the microphone. He is treated by the lawmakers with all the patience and deference the Legislature usually reserves for bleeding-heart liberals and the Save the Cute Little Puppies Club, meaning, not so much.

So, yeah, the Florida Legislature is in full-scale action mode, which is a little scary.

Sorry to sound like a sourpuss or to look a gift horse in the mouth. But if the only thing the Legislature does in its special session this week is roll back the rates of Citizens' Property Insurance, then this week will be a failure.

Oh, sure, if you're a customer of Citizens, like me, then a repeal of that 25 percent rate hike that took effect on Jan. 1 would be nice. Also nice would be repealing the law that requires an additional 55 percent Citizens rate hike later this spring.

But those things by themselves aren't enough. They don't solve anything.

And then, on Jan. 1, 2008, Citizens would have to turn around and jack up rates again.

So, what else to do?

Here is the biggest idea being kicked around in Tallahassee this week:

Let's put ourselves on the hook, and promise to use tax dollars to cover storm damage above a certain level.

Tax dollars! This would be a huuuuge philosophical shift.

Let's say we had a big, Katrina-sized hurricane. First, the private insurers would cover it up to a point (right now, that point is $6-billion).

Next, the state's "cat fund" for catastrophic coverage kicks in, with the private companies still making a co-payment along the way. Let's say that gets us up to covering, heck, $23-billion or so.

But if the total damage from a single storm were even bigger, we would promise to make up the difference out of future state tax revenue. The overall limit would be something like, say, $40-billion or $45-billion, or roughly Katrina-size.

Good things about this idea:

Right away, private insurance companies would be off the hook for much of their current risk. They would be required to reduce their rates.

We taxpayers wouldn't have to pay anything up front, either.

Bad things about this idea:

We're writing a blank check against the future. And we're shifting the burden from property owners to taxpayers in general. Even poor folks buying shoes for their kids would be subsidizing storm damage.

Like I said, that's the biggest idea. The Senate likes it, but the House is skeptical. It's an open question whether it will pass.

Otherwise, there's a hodgepodge of stuff getting kicked around. Nobody knows exactly how much good any of it will do.

The House agrees with Gov. Charlie Crist: Let's make it illegal for the big insurers to create new Florida-only subsidiaries.

And if those big guys are selling homeowners insurance in other states, but giving Florida the shaft, then let's crack down on their ability to sell auto insurance here.

There's a bunch more stuff. But the one overarching truth is that just ordering Citizens to reduce its rates doesn't address the underlying causes of Florida's problem. It will take something more than that for the governor and Legislature to claim victory this week.