With an abortion initiative probably on the Florida ballot in 2024, Florida Dems have an opportunity to campaign on policies that are less divisive and would benefit everyone (including Republicans) at zero cost to taxpayers. The first policy I propose is worth $600 - $800 per year in cash savings to average families in average Florida homes, whether owners or renters — at zero cost to taxpayers.
Floridians of all political persuasions agree that property insurance is too expensive. Prices shot up 33% in 2022 and some rates are up 40% so far in 2023. This harms all property owners and renters (insurance cost is included in rent). On top of that, paying billions per year for insurance company profits robs Florida’s economy of tens of billions in potential economic activity that would support tens of thousands of new and better jobs.
Florida Democrats can offer the Property Insurance Reduction Act: 20% off property insurance to everyone, now and forever, at zero cost to taxpayers. Savings can be even more over time. Here’s how.
We the People of Florida already own the largest — and fastest growing — property insurance company in Florida, Citizens Property Insurance Corporation. Citizens is forbidden by law to make a profit. So why are we still paying billions per year for the profits of greedy private insurance companies?
Citizens has the highest-risk portfolio in Florida by design. By covering everyone, Citizens would have the lowest-risk portfolio possible, further reducing costs for everyone.
Citizens Property Insurance Corporation was formed by Florida’s Republican House, Senate and Governor in 2002. It was touted as the “insurer of last resort” for homeowners (and others) refused private coverage. In fact, Citizens is Socialism, Republican style: a blatant gift to greedy (and generous) private insurance companies, allowing them to socialize risk by refusing to cover risky properties while extracting billions per year in profits, for the past 20 years and indefinitely.
Until 2020, Citizens covered only about 400,000 properties, mostly homes, out of over 10 million housing units in Florida. Citizens also covers condos, multi-family, and commercial buildings. Citizens’ latest financials project $5.1 billion in 2023 premiums, only about $3,000 each for 1.7 million policies on the highest-risk properties in Florida — when the “average” price of homeowners insurance is said to be $4,200. Citizens’ policies and premiums will likely outpace the projections in 2023.
Every $1 billion we save on property insurance enables $5 billion in annual economic activity, and supports tens of thousands of new and better jobs in Florida. Average Florida families will save hundreds per year, likely a total of $5 billion or more, at zero cost to taxpayers. (And the additional economic activity will generate $1 billion in annual sales tax revenue). We just need a simple bill amending existing law, as follows:
- Citizens will offer property insurance to anyone in Florida for 20% less than their current private policy’s price, or renewal offer if the policy is to expire within 4 months.
- Citizens will reduce rates for its current customers by 20% upon renewal of current policies.
- Renters (residential and commercial) will receive monthly rent reductions equal to their unit’s share of landlord’s savings on property insurance. A notice from Citizens to renters will specify each unit’s rent rebate and effective date.
- No mandatory arbitration clause is allowed in any policy.
Ideally, this policy outline can be refined into a “Fair Property Insurance Reduction Act” bill filed ahead of the 2024 legislative session by current Democrats in the Florida House and Senate. A better name and acronym would help. Whether it’s ignored or voted down, it’s essential for the 2024 campaign and a weapon to take the House and Senate for the first time since 1992.
Obviously, DeSantis and his GOP legislative sycophants could enact this in a minute (and elephants could fly). Instead, they’ll cry “Socialism!”
Really? Republicans created Citizens for their donors. Socialism is when everyone works for the government. When the government works for everyone, we call that PUBLIC, or COMMON SENSE.
Verifying feasibility is mostly a matter of arithmetic. It requires review by expert underwriters with access to information, particularly regarding the actual number of private property insurance policies in Florida and the premiums charged, which has proved elusive to me. Certainly the Florida Democratic Party has access to such experts. Financial information from Citizens is publicly available.
The U.S. Census Bureau says that there are over 10.2 million “housing units” in Florida (2022) with 66% owner-occupied. Other sources mention over 5 million homeowners policies in Florida. Someone knows the exact number and also the numbers of condo, multi-family and commercial policies.
Citizens currently offers to insure anyone who cannot get private insurance for less than 120% of Citizens’ price. Assuming private insurance companies carefully calculate their premiums to cover their risk and to make a profit, it is likely that Citizens could match coverage for 25-30% less, so starting with a 20% discount is safe. By diluting the risk pool we can save even more. Thus it is possible to reduce prices for everyone, including current Citizens customers — by more than 20%.
(To be clear, rates will reflect individual/local risk and property values, same as always.)
Citizens pays about $750 million per year for private re-insurance. This probably amounts to $150 million or more in profits for those private companies, who may or may not be generous GOP patrons. Re-insurance would be much cheaper, if needed at all, when the risk pool is diluted by 4X (or more) the number of new policies for lower-risk properties.
Disclosure: I first proposed this policy in 2009, and it was part of the Florida gubernatorial campaigns of noted economist Farid A. Khavari on the 2010 and 2014 ballots.
I freely offer this policy to Florida Dems to do with as we will. I hope it will encourage us not to leave 40% of seats uncontested (as in 2022).
Two other zero-cost policies I proposed in 2009, also part of the 2010 and 2014 campaigns, are equally valid today. These will take more time to turn into legislation but could be enacted by 2026.
Restore the Everglades and protect our estuaries by partnering with existing private companies to farm algae and clean the trillions of gallons of fertilizer-enhanced water we waste each year. The algae would be processed into carbon-neutral biodiesel and massive amounts of fertilizer, as well as other valuable products. The clean water would flow to the Everglades (and our aquifers) as nature intended. This method requires much less land than other plans. It would pay for the restoration of the Everglades and be an ongoing source of revenue for the State of Florida.
At the time I calculated that the amount of (dirty) fresh water diverted east and west to starve the Everglades, destroy our estuaries, kill manatees, and generate toxic algae blooms, was about 25,000 gallons per year for every Floridian. Looks like not much has changed since 2009.
The Bank of the State of Florida, owned by the People of Florida, could offer 5% interest on savings, 2%/15- to 20-year mortgages (within limits), and 6% credit cards, for example. It would earn massive profits for the state treasury, or rebates to the people of Florida.
If you think the Florida Democratic Party should consider one or more of these policies, please mail a copy to POLICY PROPOSAL, Florida Democratic Party, 201 S. Monroe St. Suite 300, Tallahassee, FL 32301.
You can also paste the link to this diary in the contact form at floridadems.org/contact-us/ but that doesn’t create a live link.
If anyone knows the right people and email addresses to send to, let me know and I’ll update this post.
Thanks for reading. I look forward to comments, suggestions, and questions. I’ll respond to as many as I can.
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