Fla. Gubernatorial Candidates Offer Hurricane Fund Proposals

If he is elected governor, Florida homeowners would see lower property insurance rates as soon as next year and a guarantee of at least partial coverage by the state, Democratic gubernatorial nominee Jim Davis said this week.

Davis proposed creating a $20 billion Hurricane Premium Protection Fund that would pay homeowners up to $500,000 for storm losses, leaving private insurers to cover only the remainder of damages and creating a much more competitive market for insurers in the state.

Under the new plan, the fund, created by partial premiums, would continue to grow during hurricane seasons with few storms, and would roll over into the following year, allowing the state to increase its coverage for homeowners.

The plan would also force insurance companies to pass on their savings to homeowners through rate decreases, Davis said.

“It makes the cost for the insurance companies less expensive and it forces them to pass along the savings to us,” Davis said at a news conference in Boca Raton. “It protects our premiums for the future … These insurance companies have charged us outlandish prices, telling us because the storms are coming. Well, the storms have not come … but are we going to get our money back? Of course not.”

Under his plan, Davis added, “Those dollars will stay in Florida … and the money will draw interest.”

Davis’s plan is similar to one proposed by his Democratic gubernatorial primary challenger, state Sen. Rod Smith, a proposal Davis criticized at the time as offering too many incentives to insurance companies.

Davis campaign spokesman Josh Earnest said Davis’s plan differs from Smith’s in that it would force insurers to pass on savings to homeowners, and would also provide much more initial coverage from the state. It also caps the state payout at $20 billion and puts the governor and Cabinet in charge of reviewing the fund each year to determine how much more or less coverage the state could provide to homeowners.

Sam Miller, a spokesman for the industry representative, the Florida Insurance Council, said he hadn’t yet reviewed Davis’s plan.

“If there are savings to pass along, we have to pass them along under the law,” Miller said. “What I don’t know is does it produce savings. It may or it may not.”

Miller also wondered, even given the state’s initial payment of up to $500,000 to homeowners for damage, how private insurers could afford the payments for damage to multimillion-dollar homes.

“Maybe the numbers will work, maybe they won’t,” Miller said.

Davis also plans to phase out Citizens Property Insurance Co., the state insurer of last resort.

The campaign for Attorney General Charlie Crist, the Republican gubernatorial nominee, commended Davis for entering the debate.

“We’re glad Jim Davis is finally contributing to the debate on making property insurance more affordable for Floridians who are struggling to make ends meet,” said Crist campaign spokeswoman Erin Isaac. The campaign did not comment specifically on Davis’s proposal.

Davis lashed out at Crist, blaming him partly for homeowners’ current woes.

“For six years, Charlie Crist has failed to stand up for homeowners and consumers in this state,” Davis said.

Earlier in the day at a Tampa news conference, Crist accused Davis of being out of touch with the concerns of everyday Floridians.

“I’ll fight for the people. He’ll fight for government,” Crist said. “He doesn’t get it. Nice guy, but he’s out of touch.”

Both Crist and Davis support the creation of a national catastrophe fund that would spread costs over the entire country.

Crist pledged Tuesday to force national insurers to stop isolating their risk by setting up separate companies to sell policies in Florida. He said he would also require any company selling auto policies in the state to also offer property insurance.

“If they are going to be here for that good stuff, which is fine, then they ought to be here for the tough stuff, too, and offer more alternatives, more choice and greater competition for Floridians,” Crist said.

His plan includes requiring insurance companies to provide inspections so homeowners know what they can do to decrease damage from storms, and forcing insurers to provide funds for living expenses, such as temporary shelter, in advance of their checks for overall damage, which now only come once repairs are completed.

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Associated Press writer Phil Davis in Tampa contributed to this report.