Last week, I made a statement in my post, Are Wind Mititgation Credits Killing Profits of Florida Insurers, that everybody is predicting insurance rates are going up . Then, the St. Petersburg Times ran a story, Citizens Property Rates Headed Up, or Maybe Down, Depending on Where You Live.
I was amazed. I expected all rates to go up somewhat and did not expect any to drop. I also expected the overall Statewide rate to go up approximately 10% based on the legislation and my work with the Citizens Mission Review Task Force.
Instead, the overall statewide rate will go up only 5.4%. I imagine the private carriers are not happy the rates are rasing so slow by Citizens. But, they must really be miffed that a governmental entity is lowering rates on average 9.3% in St. Petersburg and 8.6% in Hillsborough.
In Associated Industries and Private Insurers Want Florida Policyholders to Pay as Much as Possible for Property Insurance, I gave Barney Bishop a lot of grief for suggesting that each policy would have its rate raised by 10%. Still, I thought the overall average rate on a statewide basis would have increased by an amount much closer to 10%.
I do not think that it should be Florida’s public policy to allow Citizens to compete with private insurers unless it is truly an insurer of last resort. When rates drop and Citizens is an active seller of insurance at prices that are competitive with private insurance rather than an insurer of last resort, it kind of smacks of socialism.
There are also all kinds of problems with Citizens executives lobbying our elected representatives to derail consumer protections. When a governmental entity is in a private business, as is Citizens, there are many activites that the government will undertake which are not in the consumer’s or private enterprise’s long term interest. Manipulation of rates for various purposes, especially political, could be one of the interests not helpful in the long-term to consumers or private insurers.
