Tuesday, January 09, 2007

Insurance Crisis: More Brainstorming in Tallahassee

From today's Miami Herald, more ideas on how to lower insurance rates.

'A rate freeze for the state-run insurance pool, which is the largest home and condo insurer in Florida, is among the proposals in a 153-page bill that is being offered by the Senate's Banking and Insurance Committee.

Rates for Citizens Property Insurance would be frozen for one year at the Dec. 31, 2006, level and would require the insurer to set new actuarially sound rates for 2008. The bill also would eliminate a rate hike that already was approved for Jan. 1. Citizens would have to provide refunds to any policyholder who was charged the higher rates.'

Sounds great - so how are we going to pay for this? Ohhhh, I see...just gamble and hope that Citizen's never has to actually PAY on claims from a major catastrophe. But hey, at least everyone doesn't have to pay now, right? Sweet - I love short-term thinking politicians - they're the best, and here in Florida, we have the best, ever!

'Sam Miller from the Florida Insurance Council said by lowering premium rates, consumers could be facing higher costs after a major catastrophe if assessments are needed to make up a deficit in Citizens or the Florida Hurricane Catastrophe Fund, which sells reinsurance to insurers.

A proposal from the House Insurance committee is expected late Wednesday.

A major component of the Senate bill focuses on eliminating many of the onerous provisions of the insurance law that was passed in the final minutes of the 2006 legislative session last May.

One provision would be to remove the requirement that the state-run pool raise rates dramatically by March to increase its reserves so it would have the cash to pay future claims from storms.'

And more ideas that were passed around...

'• Citizens would be allowed to continue covering vacation and second homes as well as homes valued at more than $1 million.'

I particularly love that one - let's subsidize the insurance of vacation homes, because you know, THAT's the kind of business gov't should be in.

'• Citizens would be allowed to write multiperil policies throughout the state. Citizens officials have said previously that writing the extra policies would expand its premium base and spread risk. '

To be honest, I have no opinion one way or the other - though it sounds good in theory.

'• Insurers would be allowed to buy additional reinsurance from the Florida Hurricane Catastrophe Fund. This could be less expensive than buying in the private market. Insurers would be required to pass on any savings to policyholders. '

Again, this is a wonderful idea - lower the rates by subsidizing the private insurers. This is almost as genius as the original idea to create Citizen's. Now, instead of just allowing the IL to "cherry pick" the low-risk buyers, we'll now go ahead and remove all hurricane risk from the insurers and pass it on to the state. Brilliant!

'• The Panhandle's exemption from the statewide building code would be eliminated. Most experts believe stronger buildings would reduce insurance losses, and this is a move that many lawmakers and the insurance industry champion.'

Huh? Why was the panhandle ever exempted from building codes that the rest of the state had to follow? Ohhhh, that's right, it's FLORIDA politics at work here. Sorry, I forgot that reason and logic are not strong suits up in the halls of Tallahassee.

• The position of the state's insurance consumer advocate would be beefed up, moving it out of the Department of Financial Services and combining it with the Office of Public Counsel. The public counsel represents consumers in utility rate filings, something the current insurance advocate can't do for policyholders.

Why do I get the feeling that the Office of Public Counsel just got double the work with no corresponding increase in resources? Awwwwwwwesommmmme!

• Homeowners would be permitted to take on larger deductibles, buy less coverage than what would be needed to rebuild their homes after a major storm and even go without windstorm insurance if they've paid off their mortgages.

Another beauty! This way, Granny doesn't have to drive all the way over to the nearest bingo hall/indian casino for entertainment. She can just opt for the "minimum coverage" policy and get great excitement every hurricane season to see whether she loses everything (while the bank losses nothing) if her house gets hit! How is that NOT a cool way to go?

Full Article

30 comments:

Dragasoni said...

Gotta love it! Renting, and not dealing with this crap, is the biggest blessing.

-Dragasoni-

CRAZY G said...

Crazy's "" FINAL SOLUTION""

It's really very, very simple.....

The State of Florida, should just 'nationalize' the whole insurance industry.....

Since they complain about the exhorbident profits the insurance industry is making, 'if' they took it completely over, as they are inching towards, then ""ALL""" the profits could go to lowering/eliminating the sales tax...

Then we could all once again live in paradise happily ever after!!!!

CRAZY G said...

Crazy's INSANE!!!! YOU SAY!!

Citizens ""ALREADY"" has 1.3 ""MILLION"" policy holders......

>>>>>>>>EXCUSE ME<<<<<<

CRAZY THINKS IT'S NATIONALIZED ALREADY!!!!!

Let's close the loop, and take all those profits for, Florida's BEST!!!! ""HOMESTEAD"" owners....
Squeeze them snowbirds outta here, and it'll be PARADISE once more!!!

CRAZY G said...

Come on NOW!!!

Citizens is already the largest insurer in the state with 1.3 million policy holders, and charges the highest prices by law, and ""NOW"" they want to tell private indusry companies how to run their business!!!!
YAHH!!! Right!!! Citizens is indebt $2 billion, and needs a bail out!!!! WHO!!! of course is Florida resident home owmers......

"IF"", any of this makes any sense, then you gotta read Crazy's un-published/unwritten book, entitled....""You Wouldn't Believe It""....

atlas said...

The underlying key is to somehow connive all the newcomers and out-of-staters to fully fund everything - not just taxes, but now home insurance too.

Hopefully, we'll eventually figure out a way to get these same morons to pay for our utilities, car payments, and liquor bills.

What a bunch of schmucks.

ft lauderdale said...

first the smart alec comment, why not use the lottery?

Seriously, is there a think tank/citizens group having a real look at this? what do the smart informed people thinks should be done vs, IL???

CRAZY G said...

Insurance Lobby????

The insurance companies have already DUMPED, probably close to 2 million policy holders....

Citizens currently has approx. 1.3 million....having previously pawned off 800,000 to 1 million to some insurance companies [some] that went belly-up.....

CUT THE CRAP WITH THE INSURANCE LOBBY!!!!

>>>>IT'S REALLY SIMPLE.....IL SAYS: ||||IT'S OUR WAY OR THE HIGHWAY|||||<<<<

>>>IF YOU DOUBT THEM, YOUR STUPID<<<

CRAZY G said...

Over in Gulf Port, Ms. State Farm lost a court case about damages from storm flooding, etc.....

SURE!!! You can bad mouth State Farm, and they probably deserve it,

""BUT"", the bottom line is that NOW, State Farm ""KNOWS" there is ""NO HIDING"" from paying....

>>>>GUESS WHAT!!!!<<<

>>>"""YOU PAY"""<<<<

YOU WANT IT: YOU GOT IT.....NOW PAY FOR IT!!!!

SKB said...

Lies, Lies and more Lies.

http://www.gulfbreezenews.com/news/2007/0111/Front_Page/006.html

SKB said...

Here is some interesting news in the Sub Prime market.

Just goes to show you that nothing is better than having good credit combined with a proper down payment plus not getting in over your head.

http://www.consumeraffairs.com/news04/2007/01/mln_subprime.html

CRAZY G said...

LATEST NEWS ON CRIST'S CRISES!!!

http://www.palmbeachpost.com/business/content/business/epaper/2007/01/12/m1a_insure_0112.html

Talk about KNUCKLEHEAD reasoning by politicans, is just unbelievable!!!

>>>NOW THEY WANT TO EXPAND THE INSURANCE BUSINESS AND COMPETE!!!!<<<<

Currently/previously, they were charging the highest rates in the state [by law]....

""NOW"", they want to lower the rates, and expand the business, to compete with 'other' insurance companies.....

ASK YOURSELF, A STUPID QUESTION!!!!

How can you compete with somebody who themselves sets the rates on which you can charge????

>>>>THEY ARE INDEBT $2 BILLION CHARGING THE HIGHEST RATES.....WHAT'S GOING TO HAPPEN WHEN THEY LOWER THE RATES AND TAKE ON MORE POLICY HOLDERS??<<<<

CRAZY G said...

Try to clear your mind and think about this for a second!!!!

So NOW, the politicans want the 'other' insurance companies to buy re-insurance from the state, so they can 'make' them lower premiums [right?]...

According to Max Mayfield [outgoing hurricane expert]....
THE BIG ONE IS STILL COMING!!!!!

""WHEN/IF"" the big one ever comes, and hits Florida, where is the state going to get the money to pay the 'other' insurance companies????

>>>YOU DUMB JERK!!! IT'S YOU!!!<<<<

You lose, both ways, and have to pay a surcharge on top of your regular policy premium!!!!

saturn beach said...

This insurance mess is a "perfect circus" crafted by legislators who, being in the back pockets of the IL for years, now must answer to their "we want MORE free money!" constituents.

So, they connive a mortgage of the state's future, a "band-aid fix" which will keep both sides happy:

1. The IL's bank account will stay full, because ACTUAL risk has now been assumed by the state of Florida.
2. Meanwhile the "we want MORE free money" voters will get their artificially cheap insurance (to go along with their artificially cheap property taxes).

Friends, we are one "summer of 2004" away from complete financial meltdown.

Those of you who have saved, paid your bills on time, and paid your taxes faithfully (and didn't complain!) will be the ones footing the invoice for the forthcoming train-wreck. Free money giveaways have to be paid for - it's just a matter of when the bill comes due.

You heard it here first.

Have a nice weekend!
- Saturn (the 6th planet)

CRAZY G said...

Here's a comment on the possiblity of housing prices collapsing:

Taken from Joseph Schumpeter's 1939 book "Business Cycles"....

||||""People, for the most part, stood their ground firmly. But that ground itself was about to give way.""||||

And you may think it's different this time!!!! Today we struggle to understand "what ground we stand on" which is dominated by the convenient but nonsensical belief that ever-increasing credit risk, the product of a hyper-competitive banking and financial services sector–can be made to disappear merely by spreading it around via financial engineering. That's been tried before, in a different era.

It didn't work.

CRAZY G said...

>>>YOU PEOPLE ""BAD MOUTHING"" THE INSURANCE LOBBY, ARE GOING TO HAVE TO EAT &HIT SOON<<<<

The reality ""IS"" that the politicans have been ""JUST BEGGING"" the insurance companies to stay in Florida, and NOW you got a guy who has run & won, on the populist vote, and "HE" is going to stick it to them???

>>> """RIGHT""" <<<<<

BOY, ARE YOU EVER GOING TO GET SCREWED BY THE POLITICANS, THIS TIME!!!!

||||MARK CRAZY'S WORDS!!!.....
WHEN THESE GUYS ARE DONE THIS TIME, THE INSURANCE CRISES WILL BE ""OVER""....

>>>>THERE WILL BE ""NO"" INSURANCE OF ""ANYKIND""....ANYWHERE..PERIOD||||

Read The Palm Beach Post article, for yourself, and at least try to decipher WHAT it means, not what they are saying!!!!

http://www.palmbeachpost.com/state/content/state/epaper/2007/01/14/m1a_crist_0114.html


BOTTOM IS IS ""YOU'RE SCREWED"", AND YOU DON'T KNOW IT YET....

CRAZY G said...

STUPID...STUPID...STUPID!!!!

According to all the jabber, in the news.....You're going to have the politicans/bureaucrats setting the insurance rates...

In plain simple economic terms...

THAT IS PRICE FIXING!!!!

Fix the price to low....and supply disappears.....

Fix the price to high, and demand disappears

>>>>WHAT ARE THESE PEOPLE TRYING TO DO????<<<

||||BE MARKET "PERFECT""||||

THIS IS HEADED FOR A DISASTER OF EPIC PORPORTIONS...I ASSURE YOU!!!

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king said...

Usually for an annual premium, an insurance company agrees to assume the risk associated with a client’s assets. This difficult, yet rewarding industry will probably maintain its current rapid growth.

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