Skyrocketing Insurance Rates Part of Gov. Bush's Legacy

By Mitch Stacy
December 19, 2006

Earlier this year, Ginny Stevans began compiling the "book of tears'' - dozens of e-mails from Floridians who are suffering because of skyrocketing property insurance rates.

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Stevans, president of a Pasco County group formed to speak out against the increases, is feeling the squeeze herself. She saw the insurance payment on the home she and her husband bought two years ago double recently to around $3,200 annually. Her parents, who live nearby, canceled their windstorm coverage this fall because they're on Social Security and couldn't afford their $3,700-a-year premium.

She places the blame squarely on Gov. Jeb Bush and Florida lawmakers.

"Jeb backs it, he condones what's happening, he doesn't try to fix it,'' Stevans said. "Someone needs to remind them they work for us.''

From Pensacola to Key West, homeowners feel the pain every month when the mortgage payment comes due.

Thanks to a wildly destructive parade of eight hurricanes that hit Florida in 2004 and '05, many have seen their annual rates double and even triple. And they're demanding in loud voices that policymakers do something about it.

Bush, who is leaving office Jan. 2 after eight years, appointed a special panel to recommend legislation that could help fix the problem. But he will be a spectator as lawmakers grapple with a crisis that exploded on his watch.

Few blame Bush for creating the insurance mess, but he has drawn criticism for not providing homeowners much relief before he leaves Tallahassee. Some say that's unfair.

"It's the eight hurricanes that are part of his legacy, not the insurance crisis,'' insisted Sam Miller, executive vice president of the Florida Insurance Council, an industry trade group.

Miller said the losses to insurers due to the hurricanes were so severe that Florida would have to remain hurricane-free through 2009 just for the industry to break even.

For his part, Bush said no governor could have foreseen the record-breaking years of destructive hurricanes and their effect on the state's insurance industry.

And, he said, Florida probably coped better than most states would have because a catastrophe fund and Citizens Property Insurance - the state-funded insurer of last resort - were already in place.

"If not for Citizens and the catastrophe fund, we would have had not only significantly higher rates for people, but we would have not had insurance for people'' after the '04 and '05 storms, Bush said.

The issue was central to this year's gubernatorial race, and it didn't take Gov.-elect Charlie Crist long to call a special session of the Legislature for next month to start talking about solutions.

Lawmakers will consider proposals to shore up the insurance industry to prevent companies from dropping windstorm customers and try to stem the eye-popping rate increases that have priced some people right out of their homes.

Democrats want lawmakers to require insurance companies to lower rates across the board.

"We're talking about a rate rollback authority, a lot like we did after the Depression where this nation said we need to throw everything we can at this problem to turn it back,'' said House Democratic Leader Dan Gelber of Miami Beach. "If we cannot lower people's rates a substantial amount now ... then we have failed.''

However, House Speaker Marco Rubio warned against expecting a quick fix.

"No one, not the Democrats, not the Republicans, not the governor-elect, not the (newspaper) editorial boards or anyone involved in looking at this issue claims to have in their pocket a plan that dramatically lowers everyone's rate in an expedited manner,'' said Rubio, R-Coral Gables.

Miller, the Florida Insurance Council executive, said lower rates will cost Floridians one way or another. Since most proposed solutions include expanding the state's liability, those costs likely will be returned to taxpayers somehow.

On the stump, Crist proposed eliminating Florida-only subsidiaries of national insurance companies. He also wants to force companies who sell auto and life insurance in Florida to also sell property insurance if they sell it in other states.

Bush, widely praised for his leadership during the storms, said he worked to foster an urgent culture of hurricane preparedness in Florida even before the big years of '04 and '05.

Those efforts, he said, must continue if insurance rates are to level off.

"We have a hurricane problem,'' Bush said. "We happen to live in paradise, and that's the price we pay. So what do we do? We need to battle-harden the state.''

Bush said he wants to see the state's strict building codes strengthened even further and the Legislature pass a permanent tax rebate program for people who buy certain hurricane mitigation materials and supplies.

"If we do those two things and we have a couple of years where we don't have four hurricanes in a season, I think the insurance rates will drop significantly,'' he said.

State Rep. Don Brown, R-DeFuniak Springs, an insurance agent who also served on a special governor's task force to address property insurance problems, said politics - and years of quiet hurricane seasons - kept insurance rates artificially low. So a sufficient reserve wasn't available when it was needed. "

But raising rates would have been a tough sell in those years, he said, and it would be a stretch to blame Bush for what has resulted.

Bush said it's hard to say if the state could have been any more prepared to handle the insurance mess that came from the unprecedented string of storms.

"I don't know,'' he said. "It's very hard to anticipate $35 billion of losses. I don't have a crystal ball.''