Increases in property insurance premiums continue to mount on the shoulders of Floridians. Economic conditions have no bearing – boom or bust, premiums go up. The insurers’ corporate status has no bearing – for-profit insurers and the gigantic non-profit Citizens Property Insurance Corporation increase premiums. Why is this happening?

The Insurance Information Institute reports that for catastrophic losses. Insurers have paid out about $380 billion since 1980. Over one third of the total – more than $127 billion – was related to just Florida, Texas and Louisiana. Hurricanes cause awesome damage. What can be done to ameliorate the problem?

Catastrophy Payouts by State

Hurricanes Cause Big Expenses

  • Regulate the for-profit insurers? Been there, done that. When they can’t increase premiums, they either leave the state or decrease coverage.
  • Establish a government run non-profit insurer? Been there, done that. Citizens Property increases premiums while not reserving enough money that Florida taxpayers
  • Allow under-capitalized property insurers to write coverage at cut-rate premiums? Been there, done that – worked great until there was a catastrophe.

Any ideas?

Thanks to Insurance Bits’ blog for the chart. Thanks to Sean Virtue at Smith Watson Parker for his astute perspective.

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