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EDITORIAL: Fixing Citizens travel policy won't fix Florida's property insurance crisis [The Palm Beach Post, Fla.]

By The Palm Beach Post, Fla.
McClatchy-Tribune Information Services

Feb. 20--Are we happy that an executive at Florida's state-run property insurer spent $236.17 for a six-hour hotel stay in Zurich, Switzerland, to freshen up for a meeting? No, but such overbilling isn't close to the main problem at Citizens Property Insurance Corp.

Last week, Florida's inspector general released his final report after a review of Citizens' travel policies. Gov. Rick Scott asked for the review after news reports of loose spending while Citizens was raising rates on policyholders. The governor congratulated himself for seeking the review, but tighter travel will not fix Citizens or the property insurance market in Florida.

With the Florida Legislature set to convene March 5, the annual push is on to "reform" Citizens -- meaning allow the company to charge much higher rates. Behind this push is the annual warning that a bad storm could leave Citizens short of money to pay claims, which could mean assessments on all policies, not just those Citizens writes.

Fortunately, The Post'sCharles Elmore has been busting some of the myths behind this push. Example:

After any bad storm or storm season, some private companies fail. Always. To make sure that claims to those companies get paid, all policies are assessed to finance the Florida Insurance Guaranty Association. Similarly, every insurance customer in Florida pays into the Hurricane Catastrophe Fund, which supplies state-subsidized reinsurance to help companies pay claims without going bankrupt.

South Floridians whose taxes help out the rest of the state are tired of lectures about how it's wrong to share collective burdens. We are tired of the Legislature believing that private insurers have any interest in helping to solve the property insurance crisis, which they helped to create, in a way that benefits consumers.

Not long ago, some new ideas about insurance were going around Tallahassee. One would allow homeowners to insure their property only for the amount of the mortgage. Another would create a statewide pool for the first level of hurricane damage -- say, between $30,000 and $50,000 -- with private companies offering coverage above that point. There is no sign of creativity on insurance this year, even if Citizens no longer can get creative on travel bills.

Randy Schultz

for The Post Editorial Board

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