Letter to the Editor: Don’t subsidize coastal homeowners

Apr 5, 2011

The following article was published in the St. Petersburg Times on April 5, 2011:

Over the past year, the Sunshine State has been under a cloud of economic uncertainty. While there has been slight improvement in the economy, the unemployment rate is still at an unprecedented high and Florida taxpayers continue struggling to make ends meet.

Florida TaxWatch, a nonprofit, nonpartisan government watchdog and research center, is concerned by Florida’s property insurance crisis and the overexposed state-run Citizens Property Insurance Corp. and Florida Hurricane Catastrophe Fund. Neither entity has much money. In addition, both offer subsidized coverage, backed by “hurricane taxes” on insurance purchased by all Floridians, including business owners, home¬≠owners, churches, renters and even charitable organizations.

To this day we are all still paying for the storms of 2004 and 2005. How will Florida taxpayers be able to afford the additional “hurricane tax” assessments if a storm makes landfall on our coast this hurricane season? The state’s inability to ensure that Florida property insurance prices reflect the real risk of hurricanes currently leaves all of us susceptible to a financial crisis. These current and future hurricane taxes threaten Florida’s economic future and employment base.

Originally created as the insurer of last resort, Citizens has ballooned to the largest insurer in the state, writing more than 1.2 million policies, including for multimillion-dollar beachfront homes. Beachside homeowners should be forced to take responsibility for their decisions.

Now is the time to reform Citizens and the Cat Fund and reduce the role of these government agencies and their threat to our economy.

Dominic M. Calabro, president and CEO, Florida TaxWatch