Will DeSantis arrange property insurance?

You’d think state leaders would choose their words very carefully when speaking to the only home insurance regulator that is at the center of Florida’s insurance crisis and the complete collapse of the housing market. Calling names won’t win you friends or influence people, especially making cheaper insurance options.

Last month, Demotech, Inc., an Ohio-based company, announced that it would drop 17 insurers operating in Florida. The move prompted a swift response from state leaders, including complaints from federal mortgage lenders about Florida’s only insurance agency.

In his letter to Fannie Mae, Freddie Mac, and the Federal Housing Finance Agency, Florida Chief Financial Officer Jimmy Patronis, called Demotech, Inc. “a rogue regulatory agency,” playing to “destroy the financial lives of millions of Floridians.” This, from someone who seems more interested in knocking out President Biden and the IRS than finding a solution to the problem that threatens the public housing market and the broader economy.

Carping against Demotech may have bought the government time. The ratings agency put off its originally planned downgrade but a complaint with the government’s CFO cannot replace the overall policy of keeping property insurance affordable and affordable.

In 2019, Floridians paid $1,988, on average for homeowner’s insurance. Today, it’s $4,231, according to a study by the Insurance Information Institute. Property and casualty companies that still offer homeowners insurance continue to face the risk of liquidation. As a result, Citizens Property Insurance Corp., the state-sponsored insurer of “last resort,” has become the only viable option.

“When the market is healthy, Citizens shrinks as private companies take advantage of healthy markets,” Citizens spokesman Michael Peltier told Post reporter Hannah Morse. “When the market is in difficult times, we grow.”

As the state faces the precipice of another hurricane season, the stakes could not be higher. Homeowners who rely on federally subsidized loans need higher levels of insurance to meet the insurance requirements of Fannie Mae and Freddie Mac. Low ratings often force policyholders to pay more for new subsidies, especially for homeowners whose homes are financed with subsidized mortgages.

Indeed, Gov. DeSantis called a special session of the Florida Legislature to address the issue. The result was more money set aside for insurance restructuring to help struggling insurers, a move that got a boost this month when the Florida Office of Insurance Regulation announced plans to set up a temporary reinsurance program through Citizens Property Insurance Corp. current hurricane season.

The plan is subject to an “exemption” that allows struggling insurers to get insurance, the money that would allow them to provide coverage and meet the requirements for federally subsidized mortgages. Unfortunately, the waiver won’t help much if Demotech is forced to downsize or leave Florida altogether.

Worse, the state’s efforts to address the problem have not slowed down the insurance industry, which still sees climate change and ongoing lawsuits as factors that make Florida a dangerous place to do business.

It’s not like the government didn’t see this coming. Major insurance companies that offer home and auto insurance in some areas were abandoned in Florida years ago, leaving homeowners here with small companies that may be ready to take action but need more help to get insurance from the state of Florida. let him do that. .

Whether the solution is market-driven or government-driven remains to be seen. But so far the only plan seems to be that I hope we don’t fall into the storm.

If government leaders, like Patronis, are interested in tackling property insurance, they better get involved with the right companies and federal agencies.

The Palm Beach Post Editorial Board