The title to the post may seem rather absurd, but raising insurance rates and mandating less coverage is exactly what Florida’s legislators are doing with currently proposed laws. It is not escaping media covering business issues, as shown by Robert Trigaux, of the St. Petersburg Times, in “As state leaders push for higher rates, property insurers enjoy robust year.” In the article he noted:

The [insurance] industry wastes no opportunity to bemoan its inadequate rate increases and the next coming threat, five weeks before the start of Florida’s hurricane season. This, insurers insist, will surely be the year of the Big One, the Mother of Category 5’s.

It’s great theater. We’ve been watching the same play for decades. The show has an admiring audience in many of our lawmakers who swallow pretty much what a rich and connected insurance industry feeds them.

There’s just one problem. Insurers that cover people’s homes and property in the United States are doing quite well financially.

The industry’s own number crunchers – ISO and the Property Casualty Insurers Association of America – this month report that private U.S. property/casualty insurers netted $34.7 billion in 2010, up from $28.7 billion the year before. And that’s after paying taxes.

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Let’s recap. Insurance industry profits rose by double digits last year. Does that sound like the sky is falling?

“Property/casualty insurers’ positive results for 2010 show that insurers are well positioned to meet the needs of consumers and business owners as the economy recovers from the Great Recession.” That’s what David Sampson, Property Casualty Insurers Association CEO, said when announcing his industry’s strong 2010 showing.

It is true that many insurers in Florida are small, weakly capitalized and in poor shape to sustain a major storm compared to those in other states. But that’s a result, in many cases, of big insurers applying corporate tourniquets to their businesses in Florida, all but severing the parents from little state subsidiaries. That way, if a big storm hits Florida, a parent company would be legally distant from huge claims.

Which brings us full circle to Tallahassee’s keen obsession today to let the insurance industry have its way here.

State leaders are supposed to operate for the benefit of Floridians. So it’s a bizarre argument from Tallahassee that Floridians will be saved by dissolving Citizens Property and letting rates soar.

That won’t aid struggling residents. It won’t help revive the state housing market. It might create jobs, but at the cost of others. It will make employers considering expanding here think twice if their work force faces sky-high insurance rates.

One thing for sure, it will empower insurers to keep asking for more.

There are two more weeks before the legislative session ends in Florida. If you are even remotely concerned about these issues, please participate by letting your elected representative know your view. Democracy works only when citizens participate in the process. Otherwise, special and powerful interests, such as the insurance industry, have their way.

Call John Fox in our firm at 813-229-1000 for the name, address and phone number of your Representative or Senator. He will be glad to help.