By Lone Shark
Quite predictably, mainstream media outlets are hailing Governor Rick Scott’s decision to reform the property insurance industry as a “victory” for the insurance industry, while so-called “consumer advocates” were either saddened, troubled, or in mourning.Sen. Mike Fasano, R-New Port Richey, sounded exactly like his Democrat colleagues with his pitch-perfect class warfare rhetoric, complaining that, “Big business has triumphed over the needs of the consumer.”
The myopia of too many within our political class never ceases to disappoint, unfortunately. This is in fact a victory for fiscal sanity.
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Here’s the deal- we need an actual and competitive M-A-R-K-E-T for property insurance here in Florida, which is something that Florida really hasn’t had. Former Governor Charlie Crist’s very misguided move to effectively socialize the property insurance industry and “cover” everyone through Citizens Property Insurance Corporation (CPIC) was nothing more than a short sighted political ploy. It was Crist who imposed de facto price controls on the property insurance market that turned CPIC into Florida’s largest provider of homeowner’s insurance. Governor Crist even played the phony populist outrage card when State Farm Insurance announced that it wouldn’t be writing any more homeowner’s insurance policies- “Good riddance to anybody who is not treating the people of Florida right,” Crist pandered.
You have to wonder if Crist was either ignorant about how markets work or simply decided to place a political bet that he would cover as many homeowners as he possibly could under Citizens in the hope that the state wouldn’t be hit with hurricanes like we were in 2004 & 2005. If we were hit with serious hurricanes, Florida taxpayers would have been on the hook- but rest assured, Charlie would have made a beeline to Washington D.C. with hat in hand begging for a bailout.
While insurance rates will probably go up in the near term, as more insurers enter the marketplace, those rates will level out over time. Let’s not live under any illusions- Florida’s property insurance rates will typically cost most than other places in the country simply because of its geography and its exposure to hurricanes. But all these naysayers who are too busy caterwauling and cursing “Big Insurance” need to ask themselves- would it have been preferable to continue living in a Potemkin insurance village where everyone is “covered” but few would actually recover claims if an active hurricane season occurred, or would you prefer that a real insurance market gains a foothold that would be solvent to pay out its claimants when those storms do hit?