TALLAHASSEE, Fla. (AP) — Florida lawmakers will meet in a special session in mid-January to try to tackle a property insurance crisis caused by the devastating hurricane seasons of 2004 and 2005.
The widely expected session will start Jan. 16, and legislators will consider proposals to shore up the insurance industry to prevent companies from dropping windstorm policies. They will also try to avert some of the dramatic rate increases Florida homeowners have seen since the active hurricane seasons of 2004 and 2005.
Homeowners from Pensacola to Key West have bemoaned triple digit increases in homeowners insurance rates, and demanded that state policymakers figure out some way to stop it.
A special panel appointed by outgoing Gov. Jeb Bush recently made several recommendations for potential legislation. One of the major proposals is to make it easier for insurance companies to get reinsurance through the state's Hurricane Catastrophe Fund.
That reinsurance — backup coverage which pays when insurers are hit with large losses — is cheaper than private reinsurance, which has also skyrocketed in cost in recent years. Insurance companies complain that the cost of reinsurance is one of the big reasons Floridians have seen their policies jump in price.
Legislators took a shot at the insurance problem earlier this year, passing a bill in the final hours of the regular legislative session in May that was aimed at strengthening the marketplace.
But it was primarily aimed at preventing companies from fleeing the state or dropping policies. Many in the industry said that insurance has been historically underpriced in Florida and that is why when eight hurricanes hit the state in the previous two years, companies lost money. Many responded by saying they would stop writing policies here.
The bill that lawmakers passed and Bush signed aimed in part to make it easier for some companies to raise rates when there is competition. In many parts of the state, however, there is no competition.
In much of the state, homeowners' only option is to get insurance from state-created Citizens Property Insurance Corp., an insurer of last resort which has seen its rates spiral up in recent years too.
Lawmakers did do one thing in the spring to ease the rate crisis: they funneled more than $700 million in extra tax money into Citizens to avoid a budget shortfall. That greatly decreased the size of a required surcharge that all Florida homeowner pay when Citizens comes up short.
Still, underlying rates have continued to go up.
Bush has pushed hard for lawmakers to come back to Tallahassee to work on more changes, with hopes of avoiding additional large premium increases as insurers go into the market this spring to buy reinsurance.
"The lack of available and affordable property insurance is the biggest threat to our economy," Bush said. "We cannot wait until the 2007 Legislative Session to find the solutions."
"I am optimistic that we can find solutions that will address not only our immediate needs, but will also yield a better system to address future storms that are predicted to make landfall in Florida," Gov.-elect Charlie Crist said.