State insurers leave charities vulnerable
Ted Granger – Guest Opinion • news-press.com
• March 30, 2010
With one month left in the 2010 state legislative session and the Atlantic hurricane season right around the corner, I am concerned about the risk associated with the Florida Hurricane Catastrophe Fund (CAT Fund) and Citizens Property Insurance.
As president of the United Way of Florida, I know that if a major storm makes landfall in Florida this year, there is a good chance many charities throughout the state will not be able to afford the “hurricane tax” assessments that will be imposed on them and maintain current levels of service.
The fact is that the CAT Fund does not collect enough premiums in advance.
Instead, it relies upon post-event borrowing paid off by these “hurricane taxes,” leaving homeowners, renters, businesses and even charitable organizations in a tight spot.
While last year’s House Bill 1495 was the first step to stabilizing Florida’s property insurance market, recent reports indicate that both the CAT Fund and Citizens are still financially unstable.
We cannot assume that charitable organizations will be able to afford these assessments, which could amount to thousands of dollars per year, every year for 30 years, while still providing the same level of service to those we assist.
As Floridians, we are all aware of the controversy surrounding property insurance rates.
Even so, the Florida Legislature needs to work to ensure that Florida property insurance prices reflect the real risk of hurricanes.
Those who choose to live on the coast should be responsible for their decision, and not shift their burden through insurance subsidies to all Floridians, including those who cannot afford to or choose not to live in vulnerable areas.
In addition to subsidizing coastal properties, we know that continued costal development leads toadditional coastal property losses in the wake of a storm.
While the state’s My Safe Florida Home program expired last year, there are other alternative mitigation-related opportunities we hope Florida’s Congressional delegation is closely monitoring and supporting on behalf of all Floridians.
For example, storm mitigation should be added to President Barack Obama’s recently unveiled Homestar program and we encourage Florida’s leaders to support Sen. George S. LeMieux’s (R-FL) bill introduced late last year to amend the Energy Conservation and Production Act to improve weatherization assistance for low-income persons, and for other purposes.
Supporting storm mitigation on a federal level will protect against the devastating effects of hurricanes while reducing Florida’s exposure to catastrophic damage.
Reducing the risk associated with the CAT Fund and Citizens on a state level and assisting Floridians with storm mitigation on a federal level will help to Advertisement protect us both before a storm hits and long after it has passed.
I applaud the Florida Legislature for the recent passage of SB 1460, and urge Gov. Charlie Crist to sign this bill which changes the CAT Fund contract year and sets caps on exposure at $17 billion until sufficient reserves are accumulated.
As we move forward, I strongly encourage the Florida Legislature to continue to make decisions this legislative session that better protect all Floridians and businesses statewide, including nonprofits.