TALLAHASSEE, Fla. — With early predictions of $50 billion in damage from Hurricane Ian, experts worry whether the state’s struggling property insurance system will become another casualty of the storm and lead to even higher premiums.
If it fails, the cost will be passed on to all Florida homeowners, not just those who suffered damage, because of assessments levied on them to cover the losses.
“We’re relying on a strategy of hope, and that hasn’t played out,” State Sen. Jeff Brandes, a Republican from Pinellas County who has tried to push for strict insurance and litigation reforms to rein in the spiraling costs.
The governor and Legislature need to seek out solutions quickly if they want to save the industry, Brandes said, suggesting a special session after the election.
“If I’m governor, maybe not this week but in the next couple of weeks, I’d fly in the brightest minds in the insurance field and figure out how to fix this problem,” he said.
Otherwise, rates will continue to go up another 30% to 40%, he said, as they have for the past few years.
“They will gut the middle class of Florida by property insurance rates,” he warned.
The Legislature has kicked the can down the road for years, he said, failing to pass restrictions to curb the lawsuits that have driven up the cost of insurance and forced companies out of business and the state.
Also, the state has allowed many insurance companies to enter the market without enough capital to cover catastrophic events, relying on unregulated, offshore reinsurance companies, which is insurance for insurance companies.
Reinsurance jacks up the cost of premiums further, with every other dollar spent on premiums going to it.