Solu⁠t⁠⁠i⁠ons ⁠t⁠o Res⁠t⁠ore Flor⁠i⁠da’s Proper⁠t⁠y Insurance Marke⁠t⁠place ⁠t⁠o Pro⁠t⁠ec⁠t⁠ Taxpayers and ⁠t⁠he Insured

By: The James Madison Institute / 2011

By Eli Lehrer Senior Fellow, The Heartland Institute Adjunct Scholar, The James Madison Institute ​

The 2011 session of the Florida Legislature will convene in the midst of state budget worries, a lingering real estate crisis, and a still-sluggish national economy. Therefore, lawmakers will face a challenging series of problems that a single legislative session will be hard-pressed to solve. Even so, there is an area in which the 2011 Legislature does have a singular opportunity to take steps that arguably would improve the state’s economy and better protect taxpayers, while also helping to preserve Florida’s environment. To achieve those goals, the Legislature needs to undertake a comprehensive reform of the state’s dysfunctional property insurance system.

This study describes the steps the Legislature, the Governor, and the people of Florida could take to reform their property insurance system. The paper consists of four major sections. The first offers a brief overview of the problems Florida faces. The next three sections describe how the state can best change its policies with regard to the Florida Citizens Property Insurance Corporation, the Florida Hurricane Catastrophe Fund, the state’s built environment, and the evolving problems with sinkholes.

This study presents data demonstrating that Florida’s property insurance system is seriously broken and needs significant changes, some of which may be somewhat painful to — or unwelcomed by— those who benefit from the status quo. Yet those changes must be enacted if the Legislature hopes to protect the state against the risks inherent in crowding 18 million people onto a low-lying peninsula that juts out into one of the most hurricane-prone areas on Earth. For the past several years Florida has placed its public safety and fiscal health at risk, and the state has — against the odds — won each time. That winning streak cannot continue forever. Therefore, change must come because the risks are simply too great.

Read the Backgrounder here.