Tallahassee and D.C.: Get real on property insurance | Editorial [South Florida Sun-Sentinel]

South Florida Sun Sentinel (FL)

So you live in Boca Raton, Fort Lauderdale or Hollywood and think you dodged a direct hit from Hurricane Ian?

You didn’t.

The same goes for people in Tallahassee and Miami, or anywhere in Florida not in that monstrous storm’s path. The direct hit for all Floridians will be in their insurance coverage — or lack of it.

The Legislature made yet another attempt this year to stabilize the property insurance market. Supporters said the reforms would help — if we didn’t get a big storm this year. Wishful thinking.

Insured damage estimates for Ian are at $30 billion and rising. Damage claims from flooding and storm surge will go through the federal flood insurance program.

Everything else — and that should be considerable — will go through that overstressed state system. For perspective, Hurricane Michael in October 2018 caused nearly $8 billion in insured losses. Michael was smaller and struck the less-populated Panhandle.

The big news may well be if the insurance market doesn’t collapse. State regulators have temporarily blocked companies from dropping policies, but the cancellations will come.

We said it five months ago when the Legislature called a special session on property insurance, and we’ll say it again: Tallahassee must junk its conventional thinking on insurance. The market is changing. Florida must, too.

For starters, elected leaders must treat the state as a single, 21 million-person pool when it comes to property insurance. We’re partway there already.

Every insurance policy in Florida — auto coverage excepted — contains an assessment that finances the Florida Insurance Guaranty Association (FIGA). That money pays claims for insurers that can’t pay them on their own and/or become insolvent.

Two new assessments came this year, and more assessments after Ian are all but certain.

Before you South Florida homeowners complain, ask yourself: What if Ian had struck this area head-on? Then people in Tampa and Fort Myers would be helping to pay claims for policyholders here.

Anybody want to trade places with those on the southwest coast?

Since Hurricane Andrew decimated southern Miami-Dade in 1992 and with it, the property insurance market, Tallahassee has passed change after change. Because big national carriers bolted or cut way back, the Legislature encouraged formation of state-based firms.

It hasn’t worked. Too many are financially shaky. Those still in business improved their finances only by raising rates (not helpful for consumers), dropping policies (usually on older homes) and cutting coverage for roofs. If your policy can’t replace your roof, what’s the policy worth?

Floridians need more than just coverage. They need coverage that will actually pay claims after a storm, with no uncertainty. To that end, we offer some ideas that may go against Republican free-market thinking but are worth considering in a market far from free and normal.

Between 1975 and 1999, 83 tropical cyclones hit Florida, causing $51.1 billion in losses, most of it from Andrew. Since 2000, 79 storms hit the state, causing $123 billion in losses, not including Ian.

This crisis demands much from Republican legislators, and especially from Gov. Ron DeSantis.

For the last two years, Tallahassee has made cultural issues the priority — abortion, imagined “sexualization” of children and “woke” ideology. None of that helps Florida homeowners whose average insurance premiums are nearly three times the national average and rising.

DeSantis needs to stop performing for 2024 Republican primary voters. No more flights of migrants who aren’t even in Florida. No more cracks about “Brandon,” the juvenile Republican term for President Biden.

To his credit, the president shook DeSantis’ hand in Fort Myers on Wednesday, looked him in the eye and pledged the federal government’s aid until the rebuilding is done.

We ask two other things of the governor.

Acknowledge that climate change makes storms more powerful. Don’t just mention “resiliency.” Talk about how to reduce the effects of climate change, especially sea-level rise.

Lobby for a national catastrophic insurance program. Demotech, which rates financial solvency of insurers, requires carriers to be able to pay claims from a once-in-130-year storm. A federal program would eliminate that expensive top layer.

Hurricane coverage in Florida soon could be an “uninsurable peril,” meaning there wouldn’t be enough assets in the state to pay claims from the worst-case scenario. The state government’s best response to Ian is a new mindset in Tallahassee.

The Sun Sentinel Editorial Board consists of Editorial Page Editor Steve Bousquet, Deputy Editorial Page Editor Dan Sweeney, and Editor-in-Chief Julie Anderson. Editorials are the opinion of the Board and written by one of its members or a designee. To contact us, email at [email protected].