Opinion – Steve Pociask
What a difference a few years can make. Recent changes to insurance public policies have left homeowners better protected and given the state greater financial stability. Yet, there is still room for improvements, including changes that could dramatically reduce premiums for consumers.
Over a decade ago, Florida property insurance market could have been called dysfunctional. Regulatory price controls pushed private insurance away from the coast and some large insurers left the state. In its place, Citizens, the state government-run insurer of last resort, took up the slack growing to nearly 25%. Because it was pricing its premiums below market, Citizens got very big, but it did could not accumulate the capital necessary to pay claims if a major hurricane hit the coast. Citizens’ backup plan, the Florida Hurricane Catastrophic Fund was also undercapitalized. The state was one or two storms away from financial disaster.
