Establishing a dedicated funding source for grants to homeowners to strengthen their homes against hurricanes is one of a number of recommendations from a Florida business panel seeking to restore a private insurance market in the state.
The Florida Hurricane Crisis Coalition is a coalition of businesses gathered under the auspices of Associated Industries of Florida (AIF), a Florida business association. The coalition's purpose is to lend a single voice in advocating to policymakers' property insurance initiatives to create a sustainable property insurance market for both residents and commercial policyholders, according to the American Insurance Association, which is a member.
In a statement, AIA said a series of recommendations from the coalition were forwarded to the Florida Legislature in advance of a special session being convened later this month to deal with the perceived crisis of fading interest by private insurers in doing business in the state.
The AIA's Cecil Pearce, vice president, Southeast Region, is a board member of AIF and is serving as a co-chairman of the Hurricane Insurance Crisis Coalition.
"First and foremost, the members of the coalition recognize that the Florida insurance crisis did not happen overnight, and therefore, the problem cannot be solved overnight with one 'silver bullet' solution," the coalition said in its recommendations.
Members of the coalition "firmly believe that Floridians need to understand that the cost of property insurance will not fall immediately," it added.
The group said, "The preeminent concern for the business community is that our elected leaders take a long-lasting approach in providing for a viable, competitive private insurance market. Such a market is essential to ensuring available and affordable property insurance."
A key "admonition" the coalition makes to the legislature is to be "truthful with the public about the extent of Florida's hurricane risk, and how that risk impacts the amount of real premium savings from legislative proposals," the report continued.
"Florida should support actuarially sound rates and should not subsidize the rates of policyholders who live in high-risk areas," the report argued. "If further government involvement in insurance is necessary, it should be done so only under certain conditions," the coalition urged.
The coalition asks legislators to devote their time during the special session to a "limited agenda focused on the most critical needs."
The agenda should include measures to limit hurricane damage–including several mitigation initiatives; addressing the affordability of property insurance through a temporary expansion of the Florida Hurricane Catastrophe Fund; and providing additional insurance coverage options for consumers.
The report said that establishing a dedicated funding source that produces significant "hardening of homes" will send a "consistent message" to reinsurers and financial markets worldwide that Florida is committed to reducing exposure to hurricanes.
The report suggests that a logical source for this funding is the insurance premium tax. Under the existing program the tax provides approximately $400 million to fund grants for hurricane shutters, roofing tie-downs and other hurricane protection improvements for up to 72,000 homes.
To increase the funds available to help homeowners bolster their homes against storms, the report suggests that in addition to the premium tax, such funding sources as available federal dollars, increased sales collections from hurricane rebuilding activity and any monies made available from the governor's annual state budget line item vetoes be tapped.
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