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Again, Government in business to suppress cost to consumers usually only transfers the cost to Government, which in turn passes those same cost to the consumers in the form of taxes or assessments. For every action there is an equal and opposite reaction.
Government get out of the insurance business and let insurance companies charge what they want. eventually the rates will settle where the risk is and you will have a competitive market. What is something worth? What someone is willing to pay!
the politicians have ruined the insurance landscape in florida, not the weather!
Is this a surprise to anyone? My guess would be that any fund, FAIR PLAN, Assigned risk auto plan, etc. is underfunded; especially in “a worst case scenerio”. If you deal with insurance underwriting and apply a political solution, generally underfunding is what you will get.
I wouldn’t know much about borrowing $7mm but I have to wonder if this scenario is overly optimistic. If the initial cash reserve is depleted by a major storm couldn’t it change the state’s borrowing capabilities?
I think I read this story last year at the beginning of hurricane season, and the year before that, and the year before that, … pretty much every year since Charley Crist was Governor of Florida.
nothing surprising in this. The incompetent administrators have had 4 years with no storm in which to accumulate the necessary reserves. It is simply amazing that underfunding is occurring! A simple surtax during good weather patterns was not taken advantage of. I reside in FL and would expect to pay substantially more for my insurance for the privilege of living there.
The “news” here is that Goldman Sachs estimates that the FHCF can raise only $4billion in bonds post storm. But perhaps, though, they were on the low end of the estimate in October when it was estimated that it could raise from $5- $11bn in bonds. As for the rest of the numbers, those are within the range of October 2011 estimates. This story also ran in The Miami Herald on the 10th. It appears that was is actually going on is that risk perceptions are being manipulated in the quest for headlines.