Insurance gap sparks fears
As homeowner insurance giant State Farm prepares to exit Florida, some lawmakers are anxious about whether there’s enough private coverage for the hurricane-prone state.
Company officials and lawmakers are quietly discussing whether steps could be taken in a special session this fall to loosen industry rate-setting regulations. Similar legislation was vetoed this summer by Governor Charlie Crist, who concluded Florida’s insurance market was adequately financed.
Questions continue to swirl around the solvency of smaller insurers.
“In light of an unprecedented amount of conflicting information to which we have been exposed of late, I am concerned that the answers are becoming more muddled as time goes on,” Representative Scott Plakon wrote in a letter to the House Insurance Committee.
State Farm wants to revisit the legislation that would have left it largely free from state rate controls.
“We need some solutions,” said Mark Delegal, a State Farm lobbyist. “Just hoping that there will be no hurricanes or putting notes in the Western Wall isn’t going to help us hold out for long.”
Crist, during a visit to Jerusalem two years ago, inserted a prayer in the wall, asking that Florida be spared from hurricanes, such as those which ravaged the state in 2004 and 2005.
State Farm insures 750,000 homeowners in Florida, and is the biggest private carrier covering Miami-Dade, Broward and Palm Beach counties. But State Farm’s coverage base is down from more than 1 million homes and condos that had been insured before the company began shedding Florida policies because of the costly risk.
Some legislators who fear the impact of State Farm sparking an exodus of large insurers leaving Florida want to retool the legislation Crist vetoed this fall. The governor has been negotiating a gambling compact with the Seminole Tribe that could pour hundreds of millions of dollars into the state budget once lawmakers approve the deal.
Crist is expected to call a special session to okay the compact. State Farm’s legislative allies could then push to add a new property insurance bill to the lawmaking mix.