Tell those danged politicians to take their hands off our gubberment property insurance!
That's the hue and cry coming from Sinkhole Alley, where homeowners are getting a firsthand taste of Florida's free-market insurance reforms.
Citizens Property Insurance.
Sinkhole Alley is in west Central Florida. Pasco and Hernando counties sit in the heart of it and face the biggest increases. They are Republican strongholds that voted heavily for Rick Scott. He is the guy behind the reforms.
As they say, elections have consequences.
This is not to say I disapprove. Citizens Property was losing so much on sinkhole claims that it was headed for yet another taxpayer bailout.
But I am amused by voters and politicians who rant against government entitlement programs until it's their own ox that gets gored.
And make no mistake. Citizens Property Insurance is a state-owned government entitlement program.
It sells most of the sinkhole insurance in Sinkhole Alley because private insurers can't charge enough to cover their losses.
Losses aren't a problem for Citizens because it is backed by taxpayers. And so it has been charging a fraction of the market value for sinkhole coverage.
The result is predictable. Without any changes it was on track to lose $559 million next year. Sinkhole claims doubled in the past year alone as homeowners and public adjusters rushed to cash in on wall cracks.
So Scott and state lawmakers told Citizens to begin charging full freight for the policies.
They stood united: Free market good! Gubberment insurance bad!
I stood with them.
Then Citizens came out with its new rates. And Pasco and Hernando homeowners were looking at premiums between $4,000 and $6,000.
Sinkhole Alley is now Heart Attack Alley.
All those stoutly anti-government politicians that backed the reforms have been backstroking faster than Michael Phelps.
Said Gov. Scott: "We have to have a financially sound insurance program, we want insurance companies coming to our state, but we've got to be fair to our citizens also."
I think Scott is getting nervous about a Democratic rebirth of Charlie Crist, the Insurance Slayer, in 2014.
Citizens agreed to scale back the increase by half this year, and phase in the remainder. This means Citizens will only lose $219 million on sinkholes next year.
Yet the politicians who voted for the reforms still are pointing the finger at Citizens officials, outraged that they dared to do what they told them to do.
"As soon as you got your numbers, there ought to have been a light bulb moment," Rep. Jimmie Smith, R-Spring Hill, said at the public hearing in Tallahassee.
Where was Smith's light bulb when he voted on the bill? Last year Citizens took in $32 million in sinkhole premiums and paid out $245 million in claims. What did he think was going to happen to rates?
This is nothing new. In 2006, legislators required Citizens Property Insurance to charge the full price to cover hurricane losses on the coast.
Back then I wrote, "We will see tremendous political pressure to throw out [the law]. People will be squealing up and down the Atlantic and Gulf beaches. There will be a move to, once again, discount premiums and have taxpayers subsidize the coastal-insurance market."
Charlie Crist and Marco Rubio did just that in 2007.
Look for a repeat performance from Republicans next year.
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