Florida Insurance Crisis Looming

As hurricane season has now been once again thrust upon us, Florida residents are working hard at getting ready to be hit by seven potential hurricanes this year, or at least that’s what some experts are saying. They are claiming that this could be one of the worst years yet for the state, so as everyone is running out and getting their batteries and generators, and trying to eat up what’s in their freezers, it might behoove them to take a better look at their insurance policies instead.

The Florida legislature has been trying to make property insurance more affordable, and in doing so has hurt the state immensely. The legislation has expanded the state run catastrophe fund that offers reinsurance to the insurance industry, and it lowered the rates of Citizens Insurance, the state run property insurance company, so that they will be more competitive with private insurers. That does not seem like a big deal, but it is.

The problem is that the liability for storm damage now falls in the lap of Florida residents. If we are hit with another Hurricane Andrew or Charlie, we will be looking at paying for more of the losses than we did last time. There are more surcharges to be looked at and not just on property insurance.

Take a good look at your car insurance renewal, you will see surcharges on your car insurance that are destined to try and increase the catastrophe fund. It was 1%, but now your car insurance could be looking at up to a 20% surcharge. Instead of opening up the state to other car insurance companies and having them compete for our business and keep car insurance rates down, we essentially will be paying what the insurance companies have decided they won’t.

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