There are few issues that resonate with voters in the state of Florida like property insurance. If you’re one of Florida’s eight million policyholders, you know that it is expensive to live in our state – that feeling is reinforced every time you open your property insurance bill. Unfortunately, many of the legislators in Tallahassee don’t understand that feeling – Many spend more time talking to the powerful insurance lobby than they do real Floridians. There are several, however, who consistently refuse to bow to the special interests.
For our second installment of Tallahassee Spotlight, we focused on a House member who has show tremendous courage in his fight for Florida’s policyholders — Representative Rick Kriseman (D- St. Petersburg). In the struggle to save the state from Senate Bill 408, Representative Kriseman teamed up with other consumer advocates and legislators at a Policyholders of Florida rally inside the capitol. Without his steadfast effort to fight the insurance lobby, Floridians would have almost certainly have faced the complete deregulation of the insurance market – insurance companies could have charged whatever they pleased.
We sat down with Representative Kriseman to get his take on some of the most pressing issues facing Florida’s 8 million policyholders. As his impressive pro-consumer voting record would indicate, Representative Kriseman again showed himself to be a true champion for Floridians.
Q. Why is property insurance always such an important issue in the state of Florida and, more specifically, in your district?
Representative Kriseman: Whether it’s a fire, sinkhole, or hurricane, the availability of Floridians to obtain property insurance is critical. Additionally, in these difficult economic times where many Floridians are struggling to pay their mortgage, being able to obtain affordable coverage becomes even more important, as most Floridians mortgage payment includes the cost of property insurance, and as the cost increases, so does the monthly mortgage payment.
Q. What causes insurance rates in the state to be so high?
Representative Kriseman: Aside from the fact that insurance companies base their rates on the 100 year storm event, another reason for increased rates is the cost of reinsurance. Reinsurance is unregulated in the State of Florida. As such, reinsurance carriers do not have to submit for rate increases. What is even more disturbing is that many property insurance carriers, like State Farm purchase their reinsurance from their own companies, often at inflated costs.
Q. In the most recent legislative session, insurance lobbyists and even some legislators implied a presumption of guilt with regard to fraud among those policyholders submitting insurance claims. Does that strike you as troublesome?
Representative Kriseman: This trend is extremely troubling. In the United States of America, you are presumed innocent until proven guilty. To assume or presume guilt is violative of our principles and our constitution.
Q. What are your thoughts on how the state can reduce insurance rates and increase insurance availability?
Representative Kriseman: First, carriers need to move away from the 100 year storm methodology. If we are being truly honest, should Florida ever be struck by a 100 year storm, none of the carriers will be able to cover all of the damages sustained and will have to look for assistance from the federal government. Second, our state needs to be aggressive advocates for the establishment of a National Cat fund. Again, the reality is that every state in America is susceptible to some natural disaster, and the establishment of a National Cat fund could better address each state’s exposure.
Q. What role should Citizens Property Insurance Corporation play in the state?
Representative Kriseman: Citizens should be permitted to sell all lines of coverage so as to make it more competitive and better funded. This should drive down the rates, not only of citizens, but of other carriers and would reduce our state’s exposure should a major storm event occur.
Q. What are your constituents telling you about property insurance issues?
Representative Kriseman: That rates are too high, that they have difficulty obtaining coverage, and that they do not appreciate being dropped when they have never made a claim.
Q. What do you think the next legislative session holds for property insurance policyholders in the state? Should they be worried?
Representative Kriseman: Yes, Floridians should be worried. I am not encouraged about the next session, fearing that we will see more of the same – decreased coverage, increased costs, and increase barriers to claims.
Q. Is there anything else you would like to add about property insurance issues facing the state?
Representative Kriseman: The legislature needs to remember who it represents – the people of Florida, NOT the insurance companies.