No Satisfaction

Back in 1969 when the Rolling Stones sang, “You can’t always get what you want,” I doubt they were thinking about Florida insurance politics in 2011. I will go out on a limb here and say I am absolutely certain they were not thinking about Florida insurance politics of this or any year.

As Michael Adams writes in this issue in “What Killed PIP and Citizens Reform?,” that is where the property/casualty insurance industry finds itself after a legislative session that began with a new pro-business Republican governor, Rick Scott, and high hopes. The industry did not get close to everything it wanted but it did get something it needed.

The most surprising failure was the defeat of personal injury protection (PIP) reform. Despite almost weekly headlines of auto insurance scams, lawmakers found the interests of trial lawyers of more concern than those of law enforcement officers, consumer activists and motorists. Apparently fraud is Tampa and Miami’s problem, not Tallahassee’s.

The demise of reforms of Citizens Insurance Corp. is somewhat more understandable, albeit still fiscally irresponsible. At least the politics make sense- what politician wants to be responsible for raising insurance premiums? That’s like raising taxes.

Mother Nature doesn’t know Democrat, from Republican, from Tea Partier -and will strike whenever she feels like it. If the state is hit by a massive storm, and Citizens has to levy surcharges, lawmakers will still have the option of the rescuing homeowners-and themselves-by summoning state and federal financial aid. Whether that is fair, wise or responsible will be debated but the short-term politics will win in a crisis of suffering.

The main industry victory came in the form of a bill that starts to address the real costs behind rising insurance rates, including reopened claims from previous storms and sinkhole claims that are out of control. Contrary to popular belief, insurers do not drive up premiums, claims like these do.

The property insurance cost control bill is a modest accomplishment, given all the lobbying power that was directed at Citizens Insurance, the PIP fraud crisis and other matters. But if the industry could get only one gift this session, the cost control legislation looks to be the one most likely to bring it some immediate relief. Lawmakers will almost always choose ways to lower costs while postponing steps that are likely to raise rates. By focusing on cost drivers this session, they may have eliminated the biggest distraction to addressing the pricing issue in the next session.

In “Gimme Shelter,” the Stones had war and peace on their minds when they sang, “Oh, a storm is threat’ning.” Insurance is not a matter of war and peace but Florida is being threatened and the state needs more politicians willing to face the music.

Topics Florida Legislation