Posted On: June 9, 2009, 10:40 am CDT

Posted By: Arthro

A lawsuit on this would be counterproductive to the real need here, which is deregulation of rates for all insurers. This is the first step in getting the stringent price controls off all insurers and getting the property insurance system back to sanity, which we desperately need in Florida.

By the way, small insurers would be benefitting from all those people who don't want to pay the higher premiums. Do you think there are more people out there today looking to pay more for their insurance if they are currently insured by one of the small companies? No.There will still be a mass exodus from the big companies in favor of the smaller companies simply due to price.

But if the big companies pull out of Florida completely, then the system will be almost totally dependent on the Cat Fund, which currently is estimated to be $18 Billion short. That shortfall will grow tremendously, and the gap between what the state has or can borrow to pay claims will be bigger, possibly bankrupting the state.

Charlie Crist has screwed this system up terribly. I suggest that knowledgeable insurance people focus on fixing the major problems in Florida:
1) The state now runs the largest insurance company, Citizens.
2) The Cat Fund reinsurance program is estimated to be $18 billion short without enough bonding capacity to meet the needs after a hurricane.
3) A National Catastrophe Fund would allow Florida to spread the risk nationally, but will be opposed by people living in states with less exposure.

The current state budget is stretched to the limit, and not able to withstand much more of a strain. If we don't fix the property insurance system in Florida, we could very well end up with a state income tax.