If The Big One Hits, Who Gets Stuck Holding The Bag?
Alex Sink may have been very wise to have paid Warren Buffet so much money for an option to have ready access to money if a major hurricane hit Florida. (She paid Berkshire Hathaway $224 million for the option of borrowing $4 billion this hurricane season). A recent St. Petersburg Times article highlighted the problems facing Florida should a major hurricane hit. The bottom line is that the State could float bonds backed and paid for by every Floridian to cover the shortage of money to pay claims, but there are no of buyers to purchase them. I do not see this topic on the Agenda of the Citizens Mission Task Force for this Friday. I am certain it is a major concern for all and will come up. I am happy we are another week into October. Historically, the most severe hurricanes are over by now, as the waters start to cool and wind shear from the north becomes stronger. Let's hope a late hurricane such as Wilma or Opal does not visit us this year. I truly do not know if we can afford it.
As a member of the Mission Review Task Force one of your most difficult tasks may be to separate the "wheat from the chaff" so to speak; especially when it comes to apparent good ideas vs. what will happen to consumers after they are implemented. The repeal of consumer choice would not, in my opinion, serve consumers well. Neither would eliminating the wind only option; which would only increase rates and reduce coverage for thousands gambling that carriers will opt to write the wind in order to retain the other perils. After all, as I testified at your last meeting...they already write the wind on "thousands" of HRA policies, when they want to. Therefore, eliminating the wind only option would only put more exposure into Citizens and result in higher prices on the total package for "thousands". Just my thoughts.