After members of the Senate Banking & Insurance Committee acknowledged that a bill to reform of Florida’s property insurance system would likely raise rates, three Senate Democrats called on Gov. Rick Scott on Thursday to pursue a “multistate compact” as an alternative.
The compact, according to Sens. Chris Smith, D-Fort Lauderdale, Jeremy Ring, D-Margate and Jeff Clemens, D-Lake Worth, would bring together states that are prone to hurricanes, in order to spread the risk around.
“The bottom line is Florida will not solve this problem by itself,” said Clemens.
A letter to Scott, signed by Smith, Clemens, Ring and two other Democrats on the Banking & Insurance Committee, talks about insurance rates that are “doubling, tripling and in some cases, quadrupling.”
“We strongly urge you as Governor to utilize your relationship with other Governors in the Southeastern Atlantic and Gulf states, to pursue a regional approach for addressing these issues,” the letter reads.
The Senators said they were not sure how all the details of the compact would work, but said it would help align the risk and the insurance rates. Relying on a bailout from the federal government—which faced gridlock last year before approving aid for Hurricane Sandy—is not a viable option, said Smith.
“Sandy was a gamechanger,” he said.
Scott has not made any major policy proposals on the property insurance issue. In an interview, he said that he has not yet seen any of the bills being discussed in the Legislature, and that his main priorities were jobs and education.
Meanwhile, the Senate Banking & Insurance Committee continues to work on a massive bill that would overhaul Citizens Property Insurance. That bill could deter people from joining Citizens by forcing the state-run insurer to charge higher rates. It also could allow private insurance companies to raise rates faster than what is currently allowed by law.
Sen. David Simmons, R-Altamonte Springs, said he believes that the bill will create a more robust marketplace for insurance, thereby lowering rates through increased competition.
“I really believe that we’re going to see a reduction in rates,” he said.