Posted On: February 5, 2008, 3:45 pm CST

Posted By: Michael

Just because YOU paid premiums for 20 years, and YOU did not have a claim for 20 years does not mean your insurance provider made money. Your premiums may have gone to pay your neighbor's claims, or the claims of those in other parts of the state. Insurance is risk pooling. When the pool pays out more than it has taken in, it's a bad year. But that's what the pool is there for. If the pool pays out more than it has taken in over a 20-year period (as is the case in Florida), then it is unsustainable. There is too much development in Florida right on the edge of the coast. That is what has caused the losses. You wouldn't stand in a bathtub full of water holding a plugged in toaster and expect to be offered an inexpensive life insurance policy, would you? Well, it's no different in Florida. The state encouraged the development of properties on the coastline, which are now worth in excess of a trillion dollars. The only problem is the coastline is the most hurricane-exposed in the world. Game over.