Posted On: February 1, 2007, 3:42 pm CST

Posted By: Tom

I think people are missing the point about the risks of living elsewhere. Yes, there are fires, tornados, earthquakes, etc. all over the place.

The point is that other states aren't trying to artificially suppress rates, force companies to maintain business contrary to good management sense, or run and whine to Washington about how they need a national bailout. Nor are they trying to force the policyholders in other states to pay for them.

Remember, state insurance rating laws require lines of business to be self-supporting in terms of rates, and generally disallow any provision to subsidize other states. Of course companies can be profitable nationally, but in any given state have negative income. Otherwise, every state insurance commissioner would try to suppress rates to pander to voters and leverage the rest of the country to pay for it. That's simply not legal.

In terms of 2006 profits, be aware that most companies lost every penny of profit they had made in Florida for at least the last ten years (or more) as a result of the 2004-2005 hurricanes. With no profits, where is the money going to come from to pay losses?

Speaking of which, how soon before the ordinary Floridian figures out that the suppressed Citizens rates mean that any large loss will blow through Citizen's assets, thus requiring assessments or taxes for years into the future. Save a few bucks today on your homeowners premium, and put yourself and your children at risk indefinitely. Doesn't sound like a very good deal to me.