Who’s to Blame For Florida Insurance Crisis?

Columnist Robert Trigaux of the St. Petersburg Times thinks it’s about time Florida adopted a new state slogan, one appropriate for modern times.

• Perhaps “Like a good neighbor, Florida is there.”
• Or even “You’re in good hands with Florida.”

Sure, these slogans are ripped off from State Farm and Allstate, but given how the homeowners insurance industry has Florida’s elected officials wrapped securely around its collective finger, it’s only appropriate.

All the while, the Florida property insurance market burns and threatens the greater economy. Trigaux asserts that at the end of the day, Florida’s politicians, state-run Citizens Property insurance and all the special task forces are one. Consider some of the insurance news from the past week alone:

– Florida’s four candidates for governor were asked how they would help fix the insurance crisis in the state. All four conceded we’re in a big mess, yet none offered solutions that would help much in the near term. Additionally, none suggested the insurance industry should be held more accountable.

– Since 1996, the property insurance industry has given $11.2 million to Florida candidates and state political parties, with roughly three of every four dollars to Republicans, according to the South Florida Sun-Sentinel.

– On Friday, USAA, the fifth-largest property insurer in Florida, asked state regulators for a rate hike, its second increase in four months. The amount? About 40 percent.

– Among 800 surveyed Floridians asked last week who they hold responsible for the high cost of insurance in Florida, 51 percent point the finger at insurance companies. Only 19 percent named the state government, and just 15 percent blamed the weather.

– Only 14 percent, however, said insurance companies could best resolve the insurance crisis. Floridians still look to the state government for leadership on this nasty predicament. Funny how the industry gets the public blame for the quagmire but avoids responsibility to fix it.

– On Tuesday, a 15-member state panel created by Gov. Jeb Bush and chaired by Lt. Gov. Toni Jennings met for the first time to consider its options in resolving the ongoing crisis. The task force focused not on the utter lack of affordable insurance in the state but on endorsing a matching funds program for owners who spend their own money to help make their houses less prone to hurricane damage. Commendable, yes. Rock solid? Hardly.

– Citizens, the insurance industry’s convenient dumping ground for unwanted policyholders, is the state’s biggest property insurer. In a board meeting, it determined that rather than pay your rapidly rising Citizens’ premiums once a year, soon consumers can pay a portion every 3-6 months! Mission accomplished!

It’s tough to ignore the number, $87,000,000, made in one fiscal quarter by Progress Energy Florida by selling costly electricity to Floridians, even as its North Carolina parent company managed to lose $4 million in the same quarter.

The story went on to say that Progress Energy Florida enjoyed a 770 percent jump in profits in the second quarter of 2006 compared to the same quarter of 2005. Inaccurate? No. But too narrow a snapshot of Florida profits coming at a time when many Floridians are suffering sticker shock from ever-rising energy and insurance prices.

Not shockingly, Progress Energy’s executives did not like this story. It made the company look greedy, as if it were partly to blame for what is already a stagnant Florida housing market.

Big power companies are proud but unusual creatures, ones that consider themselves, and rightfully so, an integral part of their communities. They concede they must endure a Big Bad Utility image when customers lose their power or when monthly power bills start to get confused with the likes of Florida mortgage bills.

They get sensitive, too, when they take heat from rising electricity rates. They argue, in this case, that “higher” rates do not mean more profits but reflect the higher fuel costs they must pay to run their power plants.

They can claim to be misunderstood all they like, and maybe sometimes they are, to a degree. But it’s doubtful, especially at a time when people want more than anything to conserve energy, that many bill-shocked customers will send condolences. Especially as the combined cost of energy, insurance and Florida home mortgage payments continue to mount up with no end in sight.