OPINION: Dangerous winds blowing in Tallahassee

Apr 17, 2008

Bradenton Herald--April 17, 2008

One of our local legislators has a sign hanging in his office that reads “Your life, liberty and property are at risk whenever the Legislature is in session.” After my recent trips to Tallahassee and Washington to work on some legislative matters, I realize the wisdom in these words.

While there are many bills pending that could impact many various aspects of our lives, Florida insurance consumers need to be aware of one particular bill passed by the Florida Senate and which will soon work its way through the House. Senate Bill 2860, sponsored by Sen. Jeff Atwater, R-North Palm Beach, includes a proposal eliminating the requirement that Citizens Property Insurance Corp. offer wind-only coverage in coastal areas for new policies written after July 1, 2008.

A quick background and refresher on this topic is that our state-run insurer has been writing wind-only coverage in Florida for more than 40 years in most coastal areas while the private insurers write the non-wind perils such as fire, theft, liability, etc. Last year, laws were passed that authorized Citizens to write the full perils policies (including wind) outside of the windstorm areas, yet it specifically provided that Citizens must continue to offer the wind-only policies so existing policyholders would not lose additional coverage options, multi-policy discounts, and any benefit from lower assessments from the private market.

Now, SB 2860 would remove these safeguards by prohibiting Citizens from offering new wind-only policies. For thousands of homes and businesses, private market wind coverage is not available in coastal areas at any price. Therefore, this change would force new policyholders to buy all perils with Citizens. Here is why that is bad:

• Eliminating wind-only policies from Citizens will increase premiums and reduce coverage options for insurance consumers in coastal areas.

• Policyholders who must buy from Citizens are forced to suffer higher and more likely assessments.

• Policyholders will lose their multi-policy discounts currently available when auto, watercraft, or personal umbrellas are written along with the Citizens wind-only policy.

• Citizens doesn’t write, nor should it, any special endorsements or floaters. Thus, insurance consumers would not be able to buy nearly a dozen other necessary coverages typically available in their private ex-wind insurance policies designed to protect policyholders and their property.

• Current coastal property owners may find it even more difficult to sell their property in the future when potential buyers discover the increased cost of insurance, as they will not be able to purchase a wind-only insurance policy.

Unfortunately, as well intentioned as our legislators might be, they sometimes miss the mark. This is one of those times. You cannot cure Florida’s property insurance woes by legislating that government is the answer and force insurance consumers to buy their all perils insurance from Citizens.

John C. Laurie is vice president and agency manager of BB&T-Wyman Green & Blalock, a division of BB&T Insurance Services Inc., with offices in Bradenton and Lakewood Ranch. jlaurie@BBandT.com