Do Florida Legislators Think We Are Stupid?
Floridians currently have legislators that are in the pockets of and doing business for insurance companies. Virtually all states regulate insurance rates because insurance companies have been historically notorious for over charging customers following losses, as well as for under charging customers before declaring bankruptcy.
Now, our legislators have claimed that rates will stay the same and not go up if there are no regulations limiting what insurance companies can charge. Gimme a break.
Insurance companies want the regulation to cease so they can, as a group, raise the rates as much as they can---especially after hurricanes, when insurers leave the market or use the hurricane losses as reasons to raise prices knowing customers have no choice. This is what happened in the 1990s following Hurricane Andrew and after the 2004 and 2005 hurricanes.
Then, we had leaders that stood up to the insurance industry. Now, many legislators in leadership receive significant support and constant lobbying from insurance companies. The result is this anti-consumer legislation.
The legislators supporting this bill say that there will be more competition. I say that the insurance rates are going to rise with greater competition because the insurers are exempt from anti-trust laws, and there is no open market in insurance.
Our legislators are simply deceitful when they suggest this bill will lower rates or keep them the same. For example, State Farm would be charging significantly more had the Office of Insurance Regulation not stopped the requested increase. Under this bill, State Farm and all the insurers as a group could charge as much as they want.
It makes no sense, and it is very disingenuous to suggest that rates will remain the same because of more competition. There will be more competition at significantly higher cost if this bill passes.
FCAN, FPIRG, and other state consumer groups will be fighting insurance deregulation. We are pulling together the consumer coalition that was so successful in 2007 and included grassroots groups from all over the state.
When FCAN responded in the press to Sen. Bennett's announcement of this bill, we said it would send rates through the roof. http://www.bradenton.com/news/local/story/1900059.html
State Farm previously asked for 67%. If deregulated, there would be nothing to stop them, especially given the lack of competition in the Florida market. Their only real competitors are Citizens and Universal. Naturally, Bennett wouldn't deregulate Citizens. Universal is backed by reinsurance companies which could easily follow State Farm's lead and profit even more.
Deregulation has never been tried, except in the auto market in Illinois. Auto is very competitive. You could deregulate it here, and they would just go at it. But homeowner's hasn't been competitive since Andrew.
Do we really want to try an experiment with such high risk? Bennett and Proctor love their free market ideology, but do we have to test it on everyone? Can't they just buy surplus lines coverage for themselves and leave the rest of us alone?