State: Insurers told: All or none

TALLAHASSEE - Florida lawmakers appear ready to deliver on one of Gov. Charlie Crist's campaign promises to punish insurers who have retreated from the state's property market while still writing other insurance in the Sunshine State, such as auto.

In a surprise voice vote Wednesday, the Florida Senate agreed to force Florida insurance companies who write property insurance in other states to offer it here if they want to continue writing any insurance in this state. The House has a similar proposal.

"The 'cherry-picking' in this state has got to stop," said Sen. Mike Fasano, R-New Port Richey, as he proposed the new language on the Senate floor with co-sponsor Sen. Ronda Storms, R-Brandon. "We've got to send a message to the insurance industry, because we've heard that message from our homeowners back home that they won't tolerate the cherry-picking in this state any longer."

The consensus on Crist's campaign promise came as the two chambers passed differing insurance packages that aim to lower insurance premiums by shifting more risk of hurricanes from insurance companies to homeowners and state government. The chambers are expected to begin negotiations today to resolve discrepancies.

"I'm very pleased," said Crist when he heard about the Senate's changed position. "It's not important because it's something I campaigned on. It's important because I believe it will help the people of Florida."

The prohibition on insurers is expected to have little effect on individual policyholders' rates, and Sen. Bill Posey, R-Rockledge, who heads the Senate's insurance committee, said he believed it could create a new crisis in the automobile market.

"That amendment, all by itself, has the power to in the long term destroy Florida's insurance market," said William Stander, assistant vice president for Property Casualty Insurers Association of America. "They think it will force companies to write all types of insurance. I think the consequences are the opposite, that it will force companies to re-evaluate their position in the Florida marketplace whether or not they do any business here."

Other agreements between the two chambers include: a rollback on rates to 2006 levels for Citizens Property Insurance Corp. customers and more options for policyholders to reduce their premiums if they agree to assume more risk.

The Legislature also agrees that they want to require building codes in Florida's Panhandle to match stronger codes in the rest of the state.

"We have extraordinary agreement on almost all the major points of legislation," said House Speaker Marco Rubio, a Miami Republican.

Yet, the biggest difference in the two plans remains on the one issue that could deliver the biggest rate relief: offering insurers cheaper reinsurance and forcing them to pass on savings to policyholders.

Reinsurance is insurance for insurers. In Florida, the state already provides cheap reinsurance for statewide damages above $6-billion and less than $22-billion.

The chambers moved closer together on the reinsurance issue Wednesday, when the House agreed with the Senate that any additional cheap reinsurance offered by the state should be for statewide hurricane damage above $22-billion.

Both chambers contemplate covering 90 percent of damages above that $22-billion threshold - the current limit of the state's Hurricane Catastrophe Fund. But they differ on how much more coverage to offer, whether to charge for it and whether it would cover all insurers.

The House wants to offer up to $12-billion more in voluntary reinsurance coverage to private insurers, but charge for it. While the Senate has proposed a universal plan covering all insurers in which the state assumes an additional $23-billion in risk free of charge.

House leaders released data Wednesday suggesting their plan could save homeowners as much as 65 percent on their windstorm premium. But that's only a best case scenario, with every insurer participating. State Farm Florida, the state's largest private insurer with 1-million policies, said it might not participate because the reinsurance might still cost more than what it buys from its parent company.

And Senate leaders, who on Tuesday predicted their plan could save 35 percent on windstorm policies, also questioned the House numbers.

"One of our sets of numbers is wrong," said Sen. Steve Geller, D-Hallandale Beach, "and I hope it's ours. But how can theirs save more money when they're charging for it?"

- Requiring companies that offer property insurance elsewhere to offer it in Florida as a condition of selling other lines, such as auto.

- Strengthening the building code for the Florida Panhandle to match the rest of the state.

- Preventing national insurers from creating new Florida-only subsidiaries, or "pup" companies. Many major companies already have subsidiaries in place.

- Allowing homeowners to insure for just the value of their outstanding mortgage.

- Allowing insurers to buy more reinsurance from the state, providing a total of $28-billion in cheaper, backstop insurance for a hurricane season with insured losses of up to $34-billion.

- Having the state self-insure 90 percent of losses between $22-billion and $40-billion per hurricane season, sharply reducing insurers' need to buy costly reinsurance, ultimately lowering policyholders' premiums.

- Eliminating laws taking effect March 1 that will make it harder for nonhomestead homeowners to get coverage from Citizens Property Insurance.

- Expanding the pool of who pays for Citizens' deficits from just property insurance policyholders to holders of car policies and other lines of coverage.

- Requiring insurers to offer more coverage options, such as higher deductibles or contents-optional coverage.

- Banning private insurers from canceling existing homeowner's policies for up to four years.

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Comments on this article

by leni	05/22/07 02:51 PM
aig car ins, comp, is another one with scaming the people , putting a credit report before a save driver, idiotic, this was never done before, so far for the past 6 month geico has the best ins, a decent price for the policy, i hope it stays,

by leni	05/22/07 02:50 PM
who offered to me those outrages policys, the people have to be protected from those car ins, comp, who do nothing but steal the people blind with their primiums, the dont insure for accidents what that policy is for, the insure for save driving ,

by leni	05/22/07 02:46 PM
i wrote 2 small comments now on phony car ins, comp, who have to be stopped from scamming the people, when selling car ins, policys, the commisioner and others have to look in to that phony busines and stop it ,,,i have been answering 4 comp,

by leni	05/22/07 02:37 PM
one comp, even included in their car policy, hurricane catastrophy fund, these phony and bogus scames by car ins, comp, have to stop, its getting way out of hand, the licenses of those phony car ins, comp, should be revoked ,,and looked in to

by leni	05/22/07 02:33 PM
aarp car ins, comp, and others, using credit reports to hike their primiums way up, it doesent count anymore if it says save driver on my licensa, car ins , has nothing to do with a credit report, nothing, its a scame to rob people out of more money

by Lynn	03/13/07 01:29 PM
Someone told me that a law is in place now that states "no insurance company can cancel a policy in the State of Florida right now except for non-payment of premium. Any truth to this??

by KAK	02/02/07 01:02 PM
To late for us. Allstate sent our non-renewal notice yesteraday. Citing "Reduction of Hurricane Exposure in the State of Florida" It's off to search I go.

by Jim	01/19/07 02:24 PM
Where is the $.01 sales tax or lottery game to help build the cat fund? Let's start building now. Don't go with senate plan of covering 90% over $22B for free. Let's buy reinsurance from cat fund for FL mutual cos. www.lawyersmutual.com/coinfo.html

by K	01/19/07 10:07 AM
con't ... Let those who want to build wherever they want pay the costs.

by K	01/19/07 10:05 AM
to Commonsense-I thought this was a "free" country. I am certainly by no means rich but live in Pinellas in the first evac level - I pay for my own insur, don't have citizens (yet) and wouldn't expect you to pay anything on my behalf.

by CommonSense	01/19/07 12:19 AM
Why has no one yet mentioned prohibiting rebuilding on barrier islands and other extreme high risk places? We are all paying for the rich to enjoy those risky locations we can't afford.

by alan	01/18/07 05:10 PM
get ready for Citizens auto insurance at 3 times your current auto ins. rate once the private ins. companies leave Fla. completely

by wanda	01/18/07 03:57 PM
The State of Insurance should NEVER have gotten into the Insurance business. RE: reinsurance, the Florida only company's get their reinsurance from their parent companies, and yet the parent companies are still making millions.

by Wanda	01/18/07 03:53 PM
There needs to a clause written in that Insurance Companies can't cancel OR not renew, esp. when a policy holder has had NO claims. I moved my car insurance to another Co. the old co. would then not renew my homwowners. No claims ever filed.

by Francisco	01/18/07 03:32 PM
Its going to take more than 7 dys to fix this problem. We need to concetrate on fixing the problem not make ins. companies mad.

by Bev	01/18/07 03:03 PM
i worked for cit insur co and was told if the policy didn't go up 20% then surcharge it so it did. they are not following the states insurance rules and regulations. oh yes and if we didn't do, they would get rid of us when we had our work audit

by k	01/18/07 02:49 PM
We can only hope that the legislation goes through. Insurers will not leave FL - too big a market, regardless of past hurricanes!

by Mike	01/18/07 02:21 PM
Insurance companies are thriving by raping the citizens with inflated coverage and non-payment of legitimate claims. We are not allowed to insure for only what the house is worth to rebuild and it is paid for. Our taxes are inflated as well.

by Laura	01/18/07 02:12 PM
Our insurance company tells us it is "state law" that we must insure our paid for new home for twice as much as we can replace it for with contents at 1/2 of that. They will not let us insure it for what we want to,and the premiums are outragious.

by Patrick	01/18/07 02:11 PM
I have an older historic home that, strangely enough, was privately insured until now, but cannot be insured by Citizens at all (even at a higher premuim) unless I undertake extensive electrical rewiring. Talk about having no choice in the matter.

by laura	01/18/07 01:03 PM
we should self-insure ourselves as a state. forget the insurance companies and their huge profits. profits could then be given back to us in the form of rate reductions every year. auto policies would cover hurricane losses

by Anne	01/18/07 01:02 PM
As a renter who is ready to buy a home, and can afford the mortgage, but not the insurance, or the taxes. It is to be hoped that the exorbitant property tax increases will be addressed next, or we will be a state with no teachers, police or firemen.

by gh	01/18/07 12:05 PM
Allowing Cit. to offer more plans seems like a logical option. I fear that auto ins. will rise if some comp leave. If the state pays for X$ for a storm, what is the purpose of allowing others to write anyway?

by Sherrie	01/18/07 11:53 AM
4. If thousands of Floridians have been forced to have Citizens in the past year or so, why did my premiums INCREASE? The state's getting all of this money from these thousands of people. What am I paying for? Prior mismanagement of funds? NOT FAIR!

by Sherrie	01/18/07 11:47 AM
3. STOP penalizing us for living on the West side of US 19. If a major hurricane blows through, we're all screwed - including those who live on the East side of US 19.

by Sherrie	01/18/07 11:44 AM
1. We pick insurance $ options for car insurance. Exend that to homeowners insurance. 2. People who can't afford Citizens are trying to sell their home - but what's the value of a home that won't sell because the insurance is too high?

by Paul	01/18/07 10:22 AM
I think every property Insurer in the country should have a certain liability in the State of Florida. That would be the true definition of Insurance and the diversification of risk. If you profit off this country you should help this country.

by ERIC	01/18/07 10:15 AM
lets get involved in cheep Homes Food Gas Computers ect lets not stop untill USA is a socialist state

by Sarah	01/18/07 10:14 AM
For all their threats to leave Fla, the insurance companies won't for one good reason: we're the 4th largest insurance market in the country. There's too much money on the table here for them to leave.

by Carlos	01/18/07 10:10 AM
That's not true Diana. They sit around thinking of ways of jacking up our premiums and finding loopholes in our policies so they don't have to pay our claims.

by Angela	01/18/07 09:48 AM
Fine to end the cherry picking, but what's to stop companies from charging hundreds more for car ins to help cover home ins? Or not do any ins. business in FL whatsoever and completely pull out?

by Tomas	01/18/07 09:46 AM
At end the Insurance companies will do what ever they want, they are in control of the congress.

by Holly	01/18/07 09:40 AM
What the hell was Kevin McCardy (our Insurance Commissioner) doing last year? I think he was "pocketing" a whole lot money, & Jeb Bush was in on the deal too. When is Charlie going to get in there like a dirty sock & fix the property tax crisis?

by tim	01/18/07 09:39 AM
give homeowners with completed sink hole repairs the option to drop sinkhole coverage. mitigation program is not big enough to accomplish it's goal for low income homeowners in pasco.

by Dee	01/18/07 09:11 AM
It looks to me that the insurance industry will wait for the state to blink first and the lobbiests will have a field day with the senate and house. Same old Same old just different day!!

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Insurers told: All or none