Posted On: January 26, 2005, 6:08 pm CST

Posted By: John

I would never want to be insured by a carrier that was FORCED to insure anything. Sounds like a dictatorship to me. The math does not work for the assigned risk model that James gave, If there is 900,000 policies in citizens (450,000 are wind only, they love to play with the numbers) if State Farm writes 30% of the voluntary business and Allstate writes 20%, you now have 2 companies that are insuring 50% of the assigned risk, it will NEVER happen. Besides after you get to about the 8th largest writer in Florida, you have just given them more assigned policies than they write in the voluntary market. There are many small companies that only have 20,000-30,000 policies on the books and they may be the 14th largest carrier in the state. Insurance is not a right, or entitlement and everyone does not deserve to pay the same low rate that their neighbor does. As with any other business or industry, the goal is provide a service or product that people need and are willing to pay for, the problem is excessive government regulation and inability to be profitable under the current regime at the Department. If competition were ever introduced back into the Florida market place Citizens property insurance Corp. would not be necessary. Ask any consumer if they would rather have a real insurance company at $1000 or Citizens coverage at $1600. The problem is that the real companies are limited to $850 and can't make it with out a rate increase. If the consumers cry about rate increases they will get Citizens. Face it, the cost of living just went up in Florida, If you live here and stay you will have to pay more for insurance, and construction costs, and gas, and taxes, etc. Something that is not being mentioned anywhere is the fact that because the construction costs are so high that the home that has been insured for $250,000 now needs to be insured for $300,000 and this creates an additional cost to the consumer and worse yet an additional exposure increase for the companies, this is why we need more companies to take on the additional risk. Let the market price itself, if a company is 25% higher than the next company they will not sell much, and will have to lower the rates to be COMPETITIVE. Companies that gouge consumers will not make it, unless they have a better product that people are willing to pay for. You can sell claim service all day long, but most people want the bottom dollar and worry about service after the claim. And by the way Citizens is NOT loosing money, after all the claims it looks like they will not have an assessment because they lowered their anticipated loss limits.