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Keys News: Storms, not insurance, at blame for rate crisis

Thursday, July 21, 2011

Recently, the Sarasota Herald-Tribune’s Paige St. John spoke at a local event hosted by the Key West Chamber of Commerce. While I was not present at this event, I read with great interest the article “Insurers’ statistics dismay audience” (June 16).

I’m familiar with articles by St. John, which sometimes contain misleading or incorrect information, and would even suggest that some material she has previously written should appear in the opinion section of a newspaper instead of the news pages. Floridians need to realize that the crises we are forced to deal with relate to hurricanes and human behavior — not insurance. While property insurance is an evident symptom, hurricanes in conjunction with people choosing to live in high-risk areas and asking someone else to pay for the risk are the real problems.

As mentioned in the article, St. John suggested that much of Florida’s property insurance problem can blamed on the reinsurance industry. How is it that more than two dozen, financially strong reinsurers — the same companies who paid billions of dollars to cover the losses from past Florida storms, without default or reliance on taxpayer bailout or policyholder assessments — are being blamed for our state’s hurricane problem?

Instead of continuing to boast about a Citizens Property Insurance Corp. surplus, it would be useful for taxpayers to know that, unlike the reinsurance industry, which spreads risk globally, the state-run Citizens and the other government-run insurer, the Florida Hurricane Catastrophe Fund, concentrate risk within Florida. By concentrating risk within the state, all Floridians, including myself, will be subject to pay hurricane taxes, whether we are Citizens policyholders or not. We will be paying assessments that will accumulate to thousands of dollars over the life of the bond issues. I wonder if that was mentioned to the group at the chamber event?

As our elected officials work to implement solutions to improve the current situation, I implore readers to take the time to understand the predicament our state is actually in. It’s time to point the finger at the real culprits, instead of the industry at large.

Don Brown – DeFuniak Springs

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