Florida insures itself for hurricane season
SCOTT JAGOW: Today’s the start of the hurricane season — and this year could be a doozy. Forecasters expect about 15 named storms, and a handful of them could be major hurricanes. How are insurance companies reacting? In Florida, they’re running for the hills. Florida’s largest insurer is now a state-run company. Dan Grech reports.
DAN GRECH: Florida created Citizens Insurance in 2002 to be the insurer of last resort. But then came eight hurricanes in two years, and private insurers started canceling policies along the coast.
Citizens now covers nearly half of Florida properties.
NANCY WATKINS: How much business do you want to shift into Citizens? How far do you want to go?
Actuary Nancy Watkins is a principal at Milliman, an insurance consulting firm.
WATKINS: I mean at the extreme, you could have the whole state insuring itself. Is that really a good thing?
Many observers don’t think so.
William Stander is with the Property Casualty Insurers Association of America:
WILLIAM STANDER: I think history has proven that private markets are the most efficient way of moving money around, and not through government mechanisms.
But Citizens is likely to keep growing. Florida has frozen Citizens premiums until January 2009, giving the state firm the cheapest rates in town.
I’m Dan Grech for Marketplace.
Stories You Might Like
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.
