Floridians losing freedom of choice
Florida has a bigger problem than State Farm withdrawing from the property insurance market. The result of this decision will be even more catastrophic as Floridians lose the freedom to choose from whom to buy insurance products. The independence we have all enjoyed for many years as Americans and Floridians by having competitive choices from which to choose is being taken away from us and that is something we ought to all be up in arms about. We are losing our freedom of choice in purchasing insurance.
Can you purchase a homeowner’s policy from State Farm, Allstate, Nationwide, Safeco, Auto Owners, Travelers or Liberty Mutual in Florida’s coastal counties? You will find the answer is no, yet in every other state in the country you can find these carriers writing insurance even in hurricane-prone regions. Why is it these companies will still write insurance in New Orleans, Charleston, and Houston, but not in Florida? On the surface it may appear to be one thing but underneath the plethora of sound bites coming out of Tallahassee, other reasons exist. The answer is not because of the peril of hurricane but it is because we will not allow competition among insurance companies in our state. By taking away open market competition, all Floridians are losing choices that others states’ residents continue to enjoy in abundance.
If we would allow free market competition, the major carriers would all return to this state and rates would eventually go down because of the added competition. When we have choices, prices always come into line with what consumers want. If someone offers a product that we think is too expensive, we don’t buy it and they stop offering it. This is simple economics at work and we all benefit from it.
An open market as far as pricing is concerned benefits all Floridians. I cannot buy the Outback Steakhouse experience for a Golden Corral price, but I sure want the opportunity to go to either. I also think all socio-economic levels of our society are served well by having choices. When our only choice is the government, along with the companies they foster and create, we all lose. The funny thing is that those restaurants are always packed, suggesting that people want those restaurants as options for dinner.
Why is our state so interested in running businesses out of Florida at a time when we need them? Is it to protect the citizens or could the real reason be to provide financial opportunity for friends in the business? The question needs to be asked of our governor: Why will major companies not write insurance here but will write in all the other hurricane-prone states? The question needs to be asked: Why do you not allow open market competition to set prices instead of providing a government solution that no one really wants? The question needs to be asked: Who is going to benefit most from the absence of major market players in the property market in Florida?
There is a solution to this problem: House Bill 1171. This bill was passed by a large majority of our legislators in the recent session. The bill would encourage well-known major insurance companies to return to the Florida market. This bill would allow well-capitalized insurance companies to charge a market-based rate for their homeowners’ insurance policies. No one would be forced to buy from any of these companies. These companies would continue to be regulated by the Office of Insurance Regulation for solvency and claims paying ability.
Wayne Scroggins, the president and owner of Scroggins Insurance Agency, 6505 Cortez Road W., Bradenton, can be reached at (941) 795-1500.