Legislature may have worsened insurance crisis
As we trade the 2008 legislative session for the pending start of the 2008 hurricane season, let's take stock: • The average cost of homeowner's insurance in Florida is now more than $2,000 a year, about twice what it was three years ago.
• State-backed Citizens Property Insurance, the insurer of last resort, remains the state's largest property insurer with about 1.2-million policyholders, about the same as it had in 2006. It also finds itself in a weakened financial state.
• Allstate, State Farm, USAA, Nationwide and others have either stopped writing new policies in the state or have cut back what they will write. And most of the smaller, newer companies that took their place limit the number of older, coastal homes they insure. About two-thirds of the homes in Florida fall into that category.
• For another year, a record $28-billion will be sitting in Florida's hurricane catastrophe fund, which offers cheap backup coverage to insurers. If insurance companies need to tap into a major chunk of that fund, or if Citizens runs a deficit, all Florida policyholders are in deep trouble.