Fla. Dems Offer Hurricane Plan

By Matt Brady

Democrats in the Florida House of Representatives unveiled aplan last week to restructure the state's Hurricane CatastropheFund into a new entity modeled on the National Flood InsuranceProgram.

The proposal would establish a new state Hurricane InsuranceFund, which would offer coverage up to $500,000 with varyingdeductibles. The policies would be written by insurance companiesoffering homeowners coverage on behalf of the Fund, in an effort toprovide insureds with a single point of contact.

"As a private insurance agent, I know just how unstable themarket is and how expensive policies can be for most Floridians,"said Rep. Priscilla Taylor, D-Riviera Beach, the bill's sponsor."With this proposal, it is our goal to make hurricane insuranceaffordable for Floridians once more."

The proposal was announced by Rep. Taylor, along with DemocraticLeader Chris Smith, D-Ft. Lauderdale, and State Reps. FranklinSands, D-Weston; Arthenia Joyner, D-Tampa; Anne Gannon, D-DelrayBeach; and Dan Gelber, D- Miami Beach.

The Democrats said reforming the state catastrophe fund hasbecome especially important in the wake of two destructivehurricane seasons and an announcement by Allstate earlier this yearthat the company is not renewing 100,000 policies in the state andwill gradually discontinue writing most commercial propertycoverage in Florida.

Other companies are staying away from the Florida market, thelawmakers noted, forcing an increasing number of homeowners to turnto the state's insurer of last resort, Citizens Property InsuranceCorp., which by law is required to charge higher premiums thanprivate insurers. Those that are writing coverage have requestedrate hikes as high as 42 percent.

"Our insurance market has not seen a crisis like now since after[1992's] Hurricane Andrew," said Rep. Gelber. "With median incomesfalling in Florida and skyrocketing increases in gasoline and othergoods, we cannot continue to allow Floridians to risk going withouthurricane insurance because they can no longer afford it."

The changes, the Democrats said, would stabilize the market, aswell as lower rates through increased competition and improve theinsurance industry's efficiency in dealing with hurricanes.

"The Hurricane Insurance Fund will undoubtedly provide stabilityto Florida's hurricane insurance market and yield savings forFlorida's homeowners," said Rep. Joyner. "Additionally, Floridianswill be able to work with their current private insurance agent,which will increase efficiency and promote better customerservice."

Should the proposed Hurricane Fund be overwhelmed by a majorstorm or series of storms–as the NFIP has been by Hurricane Katrina(see related story on page 7)–the fund would be allowed to issuebonds, borrow from a federal disaster fund (if one is created), orpurchase reinsurance if needed.

Savings for homeowners would be immediate, the lawmakers said,as the fund is not required to be profitable or pay taxes, and itwould create more predictable risk and competition between insurersseeking to write the policies.

"Our proposal will guarantee Floridians that no matter wherethey reside, the state is working to provide them with moreaffordable insurance," said Rep. Gannon. "We look forward toworking with leadership in a bipartisan manner to help Floridiansbefore onset of the next hurricane season."

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"As a private insurance agent, I know just how unstable themarket is and how expensive policies can be for most Floridians,"said Rep. Priscilla Taylor, the bill's sponsor.