Every now and then, I come across something in the media that is simply wrong and feel compelled to do something about it. I recently came across an editorial in the Bradenton Herald, linked below, which is simply fear mongering. Accordingly, I responded with my opinion for all to contemplate on this very important issue in Florida:
In response to Insurance Fiasco, Bradenton Herald, December 27, 2008
As a member of the Citizens Property Insurance Mission Review Task Force, I want to assure everyone that change, in this case, is good.
We cannot forget that Citizens is an insurer of last resort and most of its policyholders were allowed into Citizens because no other insurer would provide insurance. Yet, today it writes more policies than any other insurer in the State. While some Citizens customers may be concerned that switching to smaller insurance companies poses a higher personal risk, many more Florida taxpayers and those not insured by Citizens are already assuming an insurmountable amount of financial risk by betting on Citizens.
As indicated in the opinion, Citizens is grossly under funded. Any major catastrophic storm would surely cause non-Citizens policyholders to pay additional premiums for those who could only find insurance through Citizens. If you want to have droves of policyholders complaining to our legislators about premiums they have to pay because Citizens did not mandate that its customers go to qualified, but smaller, private insurance companies, wait until assessments are made after a major catastrophe.
As large carriers like State Farm look to either offer cherry-picked coverage or back out of Florida altogether, we have to accept and nurture a free market structure for smaller carriers to operate profitably. We also have to remember that these smaller carriers are adhering to the Office of Insurance Regulation’s tough standards for doing business in our State. By law, these private carriers offer to place Citizens policyholders at the same or better rates and for the same or better coverage.
Significantly, the Florida Insurance Guarantee Association was established to protect policyholders in the rare event that any carriers default on policies. Much like what the FDIC is to banks, it is a system that has already been tested and provides protection to those insuring with private insurance companies.
We need to support these new insurance companies doing business in our State, because the larger ones have made their money and left. Otherwise, Floridians will continue to support one of the biggest socialist style agencies in the country that cannot adequately satisfy our insurance needs now or in the future.
Attorney William F. “Chip” Merlin, founder of Tampa Based Merlin Law Group was appointed to the Citizens Property Insurance Mission Review Task Force by Governor Crist in 2008