November 1, 2006
TALLAHASSEE – Rising property insurance rates are a priority concern in Florida this election year – among both homeowners and employers. With proposals to ease the crisis currently being debated, a diverse group of business leaders today cried foul over gubernatorial candidate Jim Davis’ Hurricane Premium Protection Fund, which takes the risk away from insurance companies and puts the burden on Florida taxpayers.
“Jim Davis is exposing our Floridians to enormous risks with a plan that will result in new taxes. His plan is filled with promises he can’t deliver. In addition, Florida will have no protection from bankruptcy since it is very likely a hurricane or a number of storms will hit Florida well before adequate reserves can be banked in Davis’ proposed fund,” said Barney Bishop, president and CEO of Associated Industries of Florida (AIF).
AIF, joined by a diverse group of statewide associations including Associated Builders & Contactors, Florida Health Care Association, Florida Pest Management Association, Florida Roofing, Sheet Metal & Air Conditioning Contractors Association, Florida Trucking Association, and Florida Wall & Ceiling Contractors Association, derailed Davis for his irresponsible plan.
The Davis plan would:
“While solving our state’s insurance crisis is certainly a priority for Floridians, this ill-conceived proposal is not the answer. Davis’ plan creates an enormous fiscal liability for the state of Florida and the insurance arena. It is also so fraught with risk that it would undoubtedly force cuts for critical programs like healthcare and education when the time comes to cover Florida’s inevitable hurricane losses.”
Under the Davis plan, it would take approximately nine to ten years to build up enough reserves to cover the losses suffered from a storm similar to Hurricane Wilma. Over the 2004-2005 hurricane seasons, Florida paid out a total of $36 billion in hurricane claims. Covering losses of this magnitude could force the state into bankruptcy.
“Sure the Davis plan could work – as long as no storms hit our state. But that’s not likely, which is why Floridians need to recognize this is a fatally flawed plan. Where will the state get the money when Florida experiences its next bad hurricane season or even one devastating, but average, storm like Wilma?”