Posted on 01/18/2007 9:00:06 AM PST by doc30
TALLAHASSEE - Florida lawmakers appear ready to deliver on one of Gov. Charlie Crist's campaign promises to punish insurers who have retreated from the state's property market while still writing other insurance in the Sunshine State, such as auto.
In a surprise voice vote Wednesday, the Florida Senate agreed to force Florida insurance companies who write property insurance in other states to offer it here if they want to continue writing any insurance in this state. The House has a similar proposal.
"The 'cherry-picking' in this state has got to stop," said Sen. Mike Fasano, R-New Port Richey, as he proposed the new language on the Senate floor with co-sponsor Sen. Ronda Storms, R-Brandon. "We've got to send a message to the insurance industry, because we've heard that message from our homeowners back home that they won't tolerate the cherry-picking in this state any longer."
(Excerpt) Read more at sptimes.com ...
Florida is also very hard on hospitals and doctors--Florida is a state for lawyers. And that has to do with how people vote.
Sounds like a great opportunity for a insurance company to make some money by insuring only post-Andrew homes.
Oh, but wait! The regulatory agencies won't let them do that! Because it's "not fair."
So post-Andrew home owners are screwed just like people who pay more to live in non-flood planes, etc.
The problem is the market is not a free market.
I don't know if Florida regulates how much they can charge.
But often states do have limits on DIFFERENCES in charges in an area.
So if the insurance company wants to raise the prices really high to cover the high-risk houses, they have to also raise the prices really high on low-risk houses.
The low-risk people will drop out, leaving too little money for the high-risk houses. You end up only insuring the people that are certain to have claims, and charging them so much they could buy the house with the premiums.
If the fees were unregulated, the insurance companies could tailor the costs to the risks. Of course, they could also price the houses they don't want to insure out of the market.
The problem is that we have meddled so much in this market, that it's hard to unravel it back to a free-market system. For example, in some states you MUST have insurance, so you can't self-insure.
Oh they'll now offer insurance, just at premium rates that will be the equivilent of the GNP of many third world countries.
No it is not. In Baltimore city (lots of crime), it costs about 3,000 a year to insure your car. 10 miles in the suburbs (low crime), it costs about 1,000 to insure the exact same car.
No way in hell should the rest of the country subsidize florida real estate.
Perhaps the law should change....no more mandatory insurance.
Yes, but if you roll snake-eyes too many times in a row, you're busted, out of the game, and the 'long run' never comes along.
You mean people were stupid enough to buy insurance that would be invalid if they needed it? Where can I find people like that, I've got stuff I could sell them.....
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Wrong-headed statement. The insurance companies are not choosing who their customers are, they are choosing what services to offer in what markets based on a business model that fulfills their first obligation; to increase value for the people who have entrusted their money to them - the shareholders. That is capitalism.
And if anyone wants to watch the special session you can find the live links here
http://www.wfsu.org/tv/live_webcasts.html
Does current Florida law allow the insurance company to take construction into account when insuring an individual property?
Uh oh. We've had State Farm Homeowner's for years but I'm told they aren't writing new homeowner's policies. Will they withdraw from auto and homeowner's? Time will tell.
Let me guess...because the rates are regulated?
People don't seem to understand that this kind of behavior either makes the cost prohibitive, or makes service unavailable. It's like the hospital ER--the public tries its best to put it out of business, then whines when the public succeeds.
"For example, in some states you MUST have insurance, so you can't self-insure."
Bit of a misnomer, really, and generally limited to liability insurance. (Mortgage companies also require casualty insurance, but that's private, not state.)
You can post a bond, typically, and it's a sound thing to do if you have a teenage driver.
I had a partner with 3 teenage sons. He posted three $30,000 cash bonds --- bonds that bore interest at 5-6%, if I recall.
Each kid's car was in the kid's name --- so no vicarious liability.
Instead of paying some absurd amount of money per year for each kid --- he made a reasonable return on his investment.
Paid one wreck --- $2,500 or so. Came out WAY ahead.
My companies always self-insure for the first $1million or so. Save TONS of money. Far cheaper to deal with the stupid car wrecks and slip-and-falls yourself than to pay an insurance company to mess with it.
The same thing in FL that happened here in Washington state. The state here put limits on health care insurer's so they bailed out. The few remaining health insurer's raised their rates. In FL, insurance companies will bail out leaving those residents without any sort of insurance.
Yes, it is!
Those that do not file claims subsidize those that do. Absolutely.
In the city you also face more opportunity for collision damage than in the suburbs or county. That is not uncommon.
If everyone is rated properly there is no problem with different charges for similar cars, houses, boats, etc. My portion of earthquake premium in Florida subsidizes those risks in active seismic zones. My portion of fire premium in Florida subsidizes the risks in fire prone areas. Those without claims subsidize those with claims. That is the way insurance works.
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