The Florida legislature recently passed a bill regulating property insurance rates in response to complaints that premiums in certain hurricane-prone areas were too high. Now a rational person might suggest that property insurance premiums in hurricane-prone areas probably should be high, but I wouldn’t expect such clarity of thought from someone like Gov. Charlie Crist.
For a summary of the mess the Sunshine State has made of its insurance market (and thoughts on how to fix it), read Eli‘s op-ed in today’s Tampa Tribune:
If Tampa Bay area residents don’t like Florida’s property insurance environment, they only have to wait. Things will get worse. With Gov. Charlie Crist’s leadership, the Legislature has so damaged Florida’s insurance markets that it now seems only federal laws opening the state’s market to outside competition can help the state’s residents in the long term.
Quite simply, the package of insurance ‘reforms’ will accelerate the collapse of both state-controlled Citizens Property Insurance Corp. and much of Florida’s private insurance market over the next decade.
Indeed, the withdrawal of private companies has already started. Despite laws that make it virtually impossible for them to leave the state altogether and additional recent ‘reform’ to forbid the creation of new Florida-only subsidiaries, companies like Allstate, USAA, Nationwide, Travelers and The Hartford have already cut back on writing new policies in Florida.
The whole thing is here.