Storms hit Florida with double whammy

OUR OPINION: INSURANCE RATES GOING UP; LEGISLATURE DIDN'T DO ENOUGH

There are two hurricane crises plaguing Florida these days: the forecast of greater hurricane activity because of a change in the weather cycle, and the soaring cost of property insurance. The increase in turbulence poses a real threat to the life and property of every resident of our state, from the Panhandle to the Keys. Still, foresight and disaster preparation can mitigate the damage.

Not so with the insurance crisis, particularly in the windstorm category. It apparently knows no bounds, and the remedies advanced by the Florida Legislature don't do nearly enough to ease the pain. For proof, consider the proposed rate increase filed just days after the Legislature sent its reform package to Gov. Jeb Bush.

State Farm, Florida's largest insurer, is asking to raise rates by an average of 70 percent statewide. This covers both casualty and windstorm-insurance policies. In South Florida, the proposed increases are even more dramatic: 142 percent for Miami-Dade County, 130 percent for Broward and 127 percent for Palm Beach.

The proposed rate hikes make a mockery of the recently enacted reform package. Rates may have to go up, but Florida residents had good reason to believe that ''reform'' would preclude increases that could lead to a doubling of premiums, particularly in view of a years-long history of double-digit hikes.

It isn't as if the Legislature ignored the problem. This year's package included a provision appropriating $715 million to cover a portion of the deficit belonging to Citizens Property Insurance.

That will help, of course, but the State Farm proposal suggests that stronger medicine is called for. Fundamental rethinking is needed to make sure that consumers have access to windstorm insurance that doesn't cost an arm and a leg.

Control the system

One recent proposal would create a statewide fund to cover the first $90,000 of damage. This could put a brake on soaring rates and is supported by, among others, the Florida Association of Independent Insurance Agents.

It is time, as well, to rethink the post-Hurricane Andrew changes, such as allowing insurance companies to insulate their profits elsewhere and from other categories of coverage in order to base their rates strictly on the most vulnerable policies. Share prices of property-and-casualty insurers are up by more 25 percent in two years thanks to hefty profits, according to a report last week in The Wall Street Journal, but you wouldn't know it from the numbers used to justify rate hikes in Florida.

No one can control the weather. But surely far-sighted and imaginative leadership can control the insurance system that protects us from the financial impact of Florida's storms.

http://www.miami.com/mld/miamiherald/news/opinion/14637278.htm