Valerie Saunders; Choices for property insurance consumers
Published: Tuesday, April 21, 2009 at 9:20 p.m.
Last Modified: Tuesday, April 21, 2009 at 9:20 p.m.
For many years now, those of us living in Florida haven’t had many good choices when it comes to finding a property insurance company to cover our homes. As consumers, we want and need more options. We want to be able to buy a policy with a private company who we actually know and who we can trust will have enough money in the bank to pay our claims if a hurricane hits.
That’s why two “consumer choice” insurance bills working their way through the Legislature this spring deserve the support of state lawmakers and Governor Charlie Crist. These measures – House Bill 1171 by Rep. Bill Proctor, R-St. Augustine and Senate Bill 2036 by Sen. Mike Bennett, R-Bradenton – would give us new options as we shop for homeowners’ coverage. These bills would allow consumers to decide for themselves whether they are willing to pay an actuarially-sound, market-based rate – which would likely be more than what they’re paying now – to buy a homeowners’ policy with a large, well-known, and financially-solid private insurer. The single most important aspect of these bills is consumer choice and whether or not we want to buy one of these policies. No one is forcing them on us. If we don’t want to purchase one, we can stay with Citizens Property Insurance Corp. or our current private insurer. Or we can keep shopping for coverage.
Think about this: When we go to the grocery store to buy food, we can choose whether we want hot dogs or filet mignon. If we want to save money, we can buy hot dogs. If we want something more, we can buy filet mignon. Why shouldn’t we have the same choices with our homeowners’ insurance? It should be entirely up us – not the state’s insurance regulators, not the Governor – to decide whether we’re willing to pay more for coverage with a large private insurer that has a history of providing good customer service and paying its claims.
After all, if you’re following the news, you know that if a really big hurricane hits Florida this summer, all bets are off as to whether Citizens – with its artificially low rates – or the state’s Cat Fund can pay all their claims and rebuild our homes.
These bills also include several consumer protections. The Senate version requires consumers to sign a form stating that they are aware they’re purchasing a policy at a market-based rate. The consumer’s agent would also have to provide a rate comparison showing what the buyer would pay with Citizens, versus what they would pay under the market-based rate. Consumers would also be directed to the state’s “shop and compare rates” website.
Why would anyone be against allowing the people of Florida to have this kind of choice? We need more private insurance companies in Florida, and we desperately need more private capital to help pay future hurricane claims. Our state is already on the hook for too much risk now. It’s pretty simple: Let’s allow consumers themselves to decide. Let’s give homeowners another option. Let’s allow the free market to work. Call your state legislator today and tell them you support House Bill 1171 and Senate Bill 2036.
Valerie J. Saunders
Florida Association of Mortgage Brokers