Not so fast!

The proposed property-insurance reforms sell Floridians short!

Article Courtesy of The Orlando Sentinel

Published  November 19, 2006


Florida homeowners deserve substantial relief from soaring property-insurance rates. But they should be wary of getting it from lawmakers in a special legislative session, which Gov. Jeb Bush is considering convening.

The session would likely seek to craft a reform package based in part on recommendations unveiled last week by a Bush-appointed task force. But the recommendations ask homeowners to assume more risk in exchange for lower premiums. They offer insurers financial incentives to entice them to operate in Florida without quantifying exactly how those incentives would benefit residents. And they fail to include bolder measures carrying the potential to land consumers prodigious savings. 

Gov.-elect Charlie Crist's plan to shelve a law allowing national insurers to operate subsidiaries in Florida that send profits out of state but keep losses in, for example, isn't among the recommendations. That law makes it possible for insurers here to claim they're drowning under the weight of claims tied to eight hurricanes that hit Florida in 2004 and 2005. But it also allows their out-of-state parents to count record profits.

To be certain, the task force offers some sensible recommendations. For instance, it suggests that homeowners get told precisely what savings they can expect on their premiums if they choose to pay to strengthen their homes. But it also advocates largely discredited courses of action, such as forming a national catastrophic fund that states experiencing few natural disasters want no part of.

Mr. Bush wisely says he won't call the special session unless there first is a consensus among officials on what recommendations make the most sense for Florida. But a consensus on some measures still could do more harm than good.

Passing a recommendation allowing homeowners to pay far greater deductibles in exchange for lower premiums, for instance, would likely entice many vulnerable, long-suffering homeowners struggling under oppressive rates. Should their homes then suffer major damage in a storm, they could find it impossible to pay the bill to fix them.

If the special session convenes, it would do better to address a few especially time-sensitive items, such as state-subsidized Citizens' latest outrageous rate-increase request. It shouldn't seek to remedy virtually overnight problems most sitting legislators let balloon over several years. Earlier hastily fashioned remedies produced programs designed to help residents strengthen their homes and to get more companies to write Florida polices. They were followed, though, by insurers dropping coverage for thousands and increasing premiums for thousands more.

Floridians voted for Mr. Crist and lawmakers to rein in the problem. Together, they should be given that chance.