The family of a young man who was seriously injured in an accident 13 years ago may finally receive compensation in 2012. The Florida Legislature will once again consider a claims bill in his case, and the insurance industry is once again mounting a campaign opposing the measure. The issue for insurers is the potential bad faith claim that could follow the bill’s passage.
The sinkhole insurance premium increase debate is over, for now. Florida’s state-backed insurer, Citizens Property Insurance Corp., will not get the rate hike it initially claimed it needed.
For all the trouble insurance causes Floridians, raising rates or leaving the state, there is an upside: Floridians must be some of the savviest insurance consumers in the country. In northern states, natives say it’s okay to complain about the weather, just understand that it’ll change in five minutes. Here, we can say the same thing about the homeowner insurance market.
Insurance is a little mysterious to most people. The risk assessment, the loss projections, rate-setting and reinsurance woes — there are days when it looks as if the industry is working off a Ouija board. “Will there be a hurricane in Florida?” The planchette, under the deft fingers of a group of insurance executives, moves to “yes.” “Will there be much property damage?” The planchette moves to a Y, then a U and, finally, a P. “Yup.”
We have talked a lot about hurricane season and the storm modeling software used by insurance companies. As insurers have evaluated the storm risks, they have proposed higher rates — Florida homeowners could be faced with huge premium increases based on the hurricane projections alone. But what would happen if actuaries factored climate change into loss projections?
We are wrapping up our discussion of 2011 weather disasters. When we began this series of posts, Hurricane Irene had not been downgraded, and the damage predictions were just beginning to come in. Since then, the bills for Irene have continued to pile up, and property insurance companies are preparing damage estimates for Tropical Storm Lee.
