But yes, there are tens of thousands of individual policy holders that face severe problems, but the problem is bigger than those individuals and my focus has been on what could happen if there are no good choices for those policy holders.
(Let's also remember that these policy holders came to the state and bought policies under the existing rules and conditions without knowing or understanding what level of state involvement there was in the rate structuring.)
Now I think you are starting to get the point that there seems to be a significant number of property insurance policy holders who now, after years of fairly stable rates, now face unaffordable rates. And this isn't just homeowners.
At this point, blaming the state's past invovlement isn't constructive even where correct.
This isn't a matter of a few people rebudgeting; it is businesses that can't be insured that close with layoffs; it is the rental market drying up because landlords/property investors can't insure their apartment and rental homes; it is yankees with secondary homes in Florida that are not insurable; it is city and state revenues that take severe drops; and I don't think that it is unrealistic to foresee a true economic disaster in Floria.
If that happens, what next?
1) We should seek solutions to this, and any other market distortions, from the point of view that THE MARKETS THEMSELVES HAVE THE BEST CORRECTIVES if you let them function in freedom.
I would normally agree, however the cows are already out of the barn. While we can leave the door open and wait for them to return, there's a lot of bad things that can happen and my questions are directed on the immediate problems.
2) This corrective will involve pain, at times.
Pain we know. But do you have a corrective action in mind?
3) Government intrusion into markets should only be within the Constitutional (State of Florida Constitution in this case) prescriptions for and proscriptions against, power. This largely limits the state to defining and enforcing voluntary contracts.
Agreed. However, once again, it is too late right now to talk about what should or should not have happened before. Realize, too, that there are more than a few people who are still battling insurance company on justified wind damage claims. Some insurance companies have shown themselves in need of legal remedies to fulfill their portion of voluntary contracts.
Again, my questions are these:
1)With the prospect of property owners unable to insure their property and unable to sell their property, what do you recommend that they do?
2)With the state aware of this situation and the potential for widespread economic loss, what does the state do?
And one point to consider,Floridians, for the most part, are not living in mansions on the sand of the beaches but are living in more modest traditional homes miles inland.
That is a good question. It MUST be framed against the backdrop of another question, though. That is: "Is the state's economic / population growth over the last several years predicated on unrealistic risk/reward scenarios regarding the weather?" If that is the case, the answer is "there is nothing they CAN do."
If, otoh, the current batch of companies are too risk averse to write policies, then the state has no other choice but to relax the requirements for insurance companies to operate (lower capital requirements, usually). The problem is, the companies who WERE small insurance operatives offering to fill those gaps almost ALL went bust down in Kendall a few years back, and the state fund had to bail them out. That should tell you something about the "real" risk.
The economic risk to the state will not allow it to abrogate the basic rules of market behavior, though. Legislatures and political bodies have left bloody corpses of punctured hubris behind every time they have tried.
The wails of class warfare that I hear over issues like this are almost never good for anything but to incite stupid decisions on the part of legislators. Of course, they are always quick to oblige.