Lots of suggestions, but no magic formula
At a meeting of a state panel looking for bold steps, no
one offers a sweeping move to solve the problem.
By CHRISTINA REXRODE
Published October 12, 2006
LARGO — Gloria N. Ellinwood thinks insurance
companies should be barred from creating spin-offs that serve only Florida.
Ginny Stevans doesn’t like how insurers can
buy reinsurance from their parent company.
Debby Zolobkowski says it’s unfair that her
premium can be tied to her credit rating.
They were among the 150 or so residents who
turned up for the all-day meeting of the Property and Casualty Insurance Reform
Committee, one of the recent state attempts to curb soaring insurance costs that
are strangling many homeowners.
Of those at the meeting — business people,
retirees, politicians, state employees and the committee members — no one denied
that Florida’s insurance situation needs fixing. But few could agree on the best
way to repair it.
During a roundtable discussion among the 15
committee members, no proposal escaped criticism, re-enforcing how their
undertaking — to fix the insurance crisis — might be just wishful thinking.
Case in point:
After several committee members said companies
should encourage homeowners to strengthen their houses against storms by
offering discounts on premiums, Kurt Lewin asked how homeowners can be expected
to shell out money for that. “We need to look at the economic realities of
asking that,” he said.
When Frank Kowalski said homeowners can’t
expect to qualify for certain coverage if they don’t replace their roof every 10
years or so, Lt. Gov. Toni Jennings replied, “The roof is supposed to last as
long as the house.”
When several committee members said a house’s
age helps determine its premium, Leslie Chapman-Henderson cautioned that it
can’t be the only determining factor, either. “We can’t draw a line in the
sand,” she said, and decide that houses built before a certain date have to pay
higher premiums. Some older houses, she said, were built during decades of heavy
storms and are stronger than some newer homes.
It went like that all day, back and forth
between proposed solutions and the reasons they might fail.
During public testimony in the first hour,
Ellinwood, a St. Petersburg interior designer and senior citizen, implored the
committee not to be trapped by a defeatist attitude. “These things are all
doable if you, the governor and the Legislature want them to be,” Ellinwood told
five committee members, who sat under a sign that read “BOLD STEPS.”
After public testimony, the rest of the
morning was devoted to the Reform Committee’s discussion of proposals, and the
afternoon to legislators’ presentations of their solutions.
Among the concerns that kept surfacing:
- Snowbirds and residents of manufactured or
mobile homes complained that the My Safe Florida Home program is a raw deal. The
program, which kicked off in August, offers matching grants up to $5,000 for
improvements that strengthen a house against storms. But the grants are
available only to site-built homes with homestead exemptions.
David A. Young, 69, drove an hour and a half
from Lakeland for the meeting Thursday. He’d like to qualify for the matching
grants, but he lives in a manufactured home.
“I sat through three hurricanes within 15
miles of my home, and it was safer than some of the shelters that got their
roofs blown off,” he told committee members.
- Handling sinkhole claims is becoming a
cottage industry for lawyers in counties like Pasco, where claims have
skyrocketed in the past couple of years. “People are looking at it (filing
sinkhole claims) like it’s payday,” said Stevans, who is the president of
Homeowners Against Citizens.
There should be a stricter definition of
sinkholes, she and others said, and a cap on what lawyers can make from those
claims.
- Steve Burgess, the state’s insurance
consumer advocate, questioned the potential conflicts of interest posed by his
office’s position under the authority of the chief financial officer. He said
his office might function better under the Cabinet, “although that perhaps would
generate its own set of criticisms,” he acknowledged.
Burgess also said that the insurance advocate
needs more authority to be effective. The consumer advocate can recommend that
the Office of Insurance Regulation challenge a rate increase, but doesn’t have
the explicit authority to do so himself.
Some committee members were skeptical of
Burgess’ plea, and asked if the consumer advocate had ever recommended an
increase over an insurance company’s proposed rate hike. (He did, one time in
the early ’90s.)
“It’s pretty easy to go out and say, 'Hey,
this rate’s too high, don’t allow it,’ ” said state Sen. J.D. Alexander. But
doing that, he said, will chase insurers out of Florida.
The Reform Committee was authorized by the
governor at the end of June and is chaired by Lt. Gov. Jennings. Of the 15
members, at least 10 have ties to the insurance industry.
This is the committee’s sixth public meeting
since August, and the only one in the bay area. The meetings are meant to follow
the governor’s instructions to solicit public comment, though five of the
planned nine are in Tallahassee.
Three hours into the meeting, committee member
Barbara Weese didn’t seem convinced that problems were being solved.
The point of the committee, said the retired
schoolteacher, isn’t just to make insurers more accountable, but to make
insurance more affordable. “The point we’re missing,” she said, “is something
has to be done to get insurance to the people.”
Christina Rexrode can be reached at
crexrode@sptimes.com or (727) 893-8318.
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