Leading Question

Don’t expect more choices anytime soon. SB 408, sponsored by Naples’ own Sen. Garrett Richter, is touted as tightening loopholes to reduce fraud (think sinkholes) and increase competition.

The bill seeks to increase the solvency of the insurance companies by addressing what drives costs for carriers. It will help lower the "unintended expenses of insurance companies," and could make some insurance carriers look at Florida in a different way, Richter says.

But local insurance agents—and even Richter—say the bill, while a step in the right direction, didn’t go far enough in dealing with the competitiveness of Citizens Property Insurance Corp., which is a necessary step to attract major carriers to Florida. Until there is profit available to the private capital insurance markets, there will be little to no competition in insurance, says Brad Havemeier, president of Gulfshore Insurance, which has offices in Naples, Fort Myers, Marco Island and Weston.

The legislation didn’t address the big issue—Citizens and its inadequate rates, says Scott Newman, director of business development at Naples-based Lutgert Insurance, which has locations in Fort Myers, Ave Maria, Marco Island and Sarasota.

Havemeier adds that the bill gives insurance companies the ability to recoup increasing costs of reinsurance more quickly. But until insurance companies can charge a rate that aligns with catastrophic losses from windstorms, there won’t be a lot of competition, he says.

The top 20 private insurance companies in Florida had average rate increases of 15 percent the past two years. Citizens averaged a 7 percent rate increase and is capped at 10 percent, and studies have shown Citizens is charging 40 percent to 50 percent under where it needs to be to break even, Havemeier says.

Richter says that if a Citizens reform bill had passed, both pieces of legislation would have attracted more competition. "We need to pass some legislation next year that accelerates Citizens back to the insurer of last resort and not the insurer of more frequent resort," he says. He plans to propose a bill again in the next legislative session addressing Citizens’ low-cost insurance that is not actuarially sound.

Havemeier says the Legislature’s goals over the next four to six years need to be focused on getting rid of Citizens and deregulating Florida’s property insurance markets. That would help get the big red X off Florida on insurers’ maps.
 

$30,000
The amount the City of Naples has budgeted for the annual Fourth of July fireworks show at Naples Pier.

July 1
A new law will take effect that adds a monthly charge to electric utilities for customers; the funds will be deposited into the Sustainable & Renewable Energy Policy Fund.