Jun 29, 2009 7:26 pm US/Eastern
Some Fear The Next 'Big One' Will Bankrupt Florida
MIAMI (CBS4) ―
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Hurricane Dean, Seen from the International Space Station as it passed near Hispanola 12:50 Pm 8/18/07. The storm was a category 4 at that time with winds of 150 MPH.
NASA
Hurricane season is here and the worries are in the air. At issue –again—is the prospect of a state battered and possibly bankrupted when the next "Big One" hits.
Florida lawmakers thought they had a partial answer. They sent a bill to Governor Charlie Crist's desk that would have allowed insurers far more leeway to sharply raise their homeowner policy premiums. Those insurers say they needed those big rate hikes to cover massive liability exposure.
Governor Crist vetoed the bill, and on a swing through Miami Monday he defended that choice.
Crist said, "I understand if we have a 100 year storm it will cost a lot of money, but the position this administration has taken is people should not be required to pay for a 100 year storm when we don't have one, only when it does happen, and then we will respond appropriately."
As it stands now Florida's Hurricane Catastrophe Fund has—depending on the estimate—a shortfall of up to $15 billion. The governor's veto, critics say, could make matters far worse. It may further hasten the departure of giants like State Farm, which had already said it would be phasing out homeowner policies in the state.
Even so, Crist had a defender Monday in Miami Beach Democratic State Senator Dan Gelber. He told
CBS4's Michael Williams, "The truth is you can't give people such high premiums that they are forced out of their homes anyway."
Gelber--and indeed many lawmakers—says the only answer is to spread the risk and the costs nationally. They're hopeful President Obama will follow through on his repeated campaign promise to push for a national catastrophic insurance fund.
Without it, hard pressed Floridians and their insurers continue to take a huge gamble. Gelber put it bluntly when he said, "If we don't get a national catastrophic fund we are in a lot of trouble. The state of Florida right now has an insurance policy that is a faith based policy. We hope there is not a hurricane because if there is we are in a lot of trouble."
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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