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Property insurance hook digs deeper into us all

Ever noticed how we're all on the hook to be billed more, and more often, for potential debts we never personally incurred? They are piling up fast. Here are three looming examples.

$30,000: How much a typical U.S. family owes based on the amount the federal government is borrowing.

$1,017: How much a typical U.S. family pays in additional insurance premiums to cover the cost of treating the uninsured.

$6,250: How much a typical Florida family would be assessed if we exhaust all the funds in our state-run Citizens Property Insurance Corp. and the Florida Catastrophe Fund, to cover an estimated $28 billion remaining in insured damages from one severe hurricane strike of a large Florida population center.

Unintended bills like these can really mess up wallets already rifled by the poor economy and a sharp stock market decline.

I especially mention this last lurking debt because Monday, June 1, starts our hurricane season. And after several years without major storms in Florida, we're still full of hollow political promises to "fix" Florida's property insurance market.

So here's the best news I can offer today. Only 184 days until the Florida hurricane season ends.

I'm not sure what variety of Kool-Aid they're swilling in Tallahassee. After campaigning to fix property insurance, Gov. Charlie Crist last week quietly signed a bill likely to raise Citizens Property premiums by 10 percent, starting in January. More 10-percent increases could come after that.

And here is Crist, despite all his anti-insurance company rhetoric, taking his sweet time deciding whether or not to sign another pending bill to let larger insurance companies raise insurance premiums as they see fit.

State Farm, Florida's largest private home insurer, says it's given up and will abandon the state homeowners market by next year.

State budget pressure eroded other hurricane protections. For example, an insurance capital incentive program started with $250 million to lend out to insurers willing to write new policies in Florida. That's kaput.

And what of My Safe Florida Home, a program created to encourage home mitigation and help owners lower their insurance costs? The Legislature declined to give it new funds and took back what was left.

Florida regulators point to new insurers offering homeowners coverage. That's true, but these firms are small and untested. And their capacity is still tiny compared to what we're losing in departing State Farm.

Here's what continues to confound me: Insurers are too doggone good at crying poverty and insisting they'd be toast in the event of a major hurricane swiping a large Florida metro area.

Yet I look at the property insurers' own report of their industry profits and am dumbfounded. Here are the past five years:

2008: $5.4 billion (estimated).

2007: $61.9 billion.

2006: $65.8 billion (a modern record).

$2005: $44.2 billion.

$2004: $38.5 billion.

Do these numbers suggest an industry on the brink or in desperate need of higher rates? Sometimes the only Category 5 around here seems to be the hot air of a powerful industry blowing in all those Tally ears.

Robert Trigaux can be reached at trigaux@sptimes. com or (727) 893-8405.

Property insurance hook digs deeper into us all 05/30/09 [Last modified: Saturday, May 30, 2009 4:31am]
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