Florida's insurance rates: Time to drop

Orlando Sentinel's Scott Maxwell talks with FOX35 about home insurance rates.

In 2004, hurricanes pounded this state like it was a punching bag.

Charley, Frances, Ivan and Jeanne stole our power, ripped off our roofs and downed our trees.

So when the insurance companies jacked up our rates on the heels of those storms, most of us understood.

Allstate bought you a new roof. So you paid Allstate 10 percent more the next year. We all got that.

But it's been years since a major storm hit the Sunshine State — and rates have continued to rise.

Sometimes 10 percent. Sometimes 30 percent. Sometimes more.

Even when claims — not to mention average family incomes — went down, rates still went up.

Why? Well, the insurance folks had a new excuse every time we asked.

First, they blamed hurricanes. Then sinkholes. Then fraud. And construction costs. And reinsurance costs. And .. and … and …

Basically, any time a stiff wind blew or the stock-market ticked, the insurance companies cried poor-mouth and claimed they had another excuse to jack up your rates.

And they did so with the blessing of Florida's politicians and bureaucrats.

You see, insurance rates are theoretically regulated in this state. (I'll pause here to give you a moment to laugh, scream or barf.)

Unfortunately, the politicians and bureaucrats who are supposed to be industry watchdogs act more like lapdogs. They suck up campaign donations. They do the lobbyists' bidding. Sometimes, the regulators even end up working for the insurance companies themselves.

Finally, however, one of Florida's elected leaders is demanding answers — and rate cuts.

Specifically, Chief Financial Officer Jeff Atwater said that if insurance companies used the rising cost of reinsurance (what they pay to offset some of their risk) as an excuse to jack up rates a few years back, they should be cutting rates now that reinsurance costs are down as much as 20 percent.

And he's right.

Sure, Atwater's consumer-oriented epiphany is bit belated for my taste. But at least he's saying something — which is more than can be said for many of the people we send to Tallahassee.

And that includes our insurance commissioner … you know, the guy whose job it is supposedly to watch your rates.

In response to Atwater, Insurance Commissioner Kevin McCarty basically served as an apologist for the industry, saying no one should expect quick drops.

Quick hikes? You bet. But quick drops? Those take time.

 

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