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CBS4 Investigates The Hurricane Insurance Crisis

Part 5: Who Will Win?

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MIAMI (CBS4) ― "For Sale" signs are popping up like weeds, and home prices are plummeting. Moving companies are reporting for the first time more families are getting out of Florida than moving in.

Florida's hurricane insurance crisis and how to solve it was a major campaign issue. When Charlie Crist was running for governor, he said, "There's no bigger problem. I mean, people are screaming about their property insurance."

But despite the recent firestorm of consumer complaints and growing signs of a real estate slowdown, Cbs4's Al Sunshine investigation found local voters remain deeply divided, seriously questioning if state lawmakers will really cut insurance bills and restructure the industry during next week's special session.

Dean Klevan, a homeowner in Pinecrest, said "We are in a hurricane zone, so you've got to pay to play," says Dean Klevan, a homeowner in Pinecrest. "If you live here. Then yes, I think lawmakers can make a difference."

Others, like Miami Beach condo owner, Brian Esquenazi, says "Insurance companies are just so powerful in this state and this country, and the way I see it, they just kind of own a lot of the lawmakers, given the amount of money they contribute to their campaigns. I think they write the laws in the state of Florida."

The insurance industry writing state laws. Is that possible?
It's not hard to track the insurance industry's recent campaign contributions. Insiders say it's in the millions!

Ben Wilcox of Florida's Common Cause, a nonprofit agency watching out for citizens' issues, says, "We have just gone through what is the most expensive election cycle in Florida history, and these lawmakers have, for the most part, all of them have taken money from the insurance industry.

The money has flowed both ways: Democrats and Republicans.
Wilcox believes, "To often, decisions involving questions like property insurance are made based upon, you know, what special interests have contributed to lawmakers and not what's in the public's best interest."

"Not in the public's best interest", like laws protecting insurance industry profits at the same time spreading more financial risk to homeowners, according to the Consumer Federation of America, Bob Hunter. "The insurance industry carefully cultivates a perception that they're an ultra-high risk business, requiring excessive returns and huge premiums to fight off the onslaught of catastrophes. But they are in fact low risk to investors." He adds, "The insurance industry is very well off. It has a lot of lobbyists in Tallahassee."

Miami Herald business reporter Bea Garcia has tracked campaign contributions through Tallahassee for years. "I think the industry has gotten the better part of the deal in the last couple of years, and the way that the legislature has sort of solved the issue is transfer more risk to the homeowner."

Some local lawmakers compare the battles with the insurance industry as one fighting an "800-pound gorilla", said State Republican Rep. Julio Robaina (Dist. 117)

Another state representative, Democrat Dan Gelber (Dist. 106), says "The bad news is the exact same people who wrote the last bill will likely be writing the next bill." "The only thing that's changed a little bit is that I don't think they expected the outrage that they received."

To quiet that outrage and fix the problem, state lawmakers are now proposing rate freezes, cutting current bills by at least 25 percent and putting more pressure on the industry to lower its local rates.

Insiders predict intense political opposition. Richard Benrubi of the Florida Lawyers Association says, "If we lay the seeds now and keep banging that drum, and if hurricanes keep coming and folks just continue to be effected, hopefully, somebody's going to hear our voice." Others, like Bea Garcia of the Miami Herald, think there might be some movement. "I think we'll see maybe tiny little fixes, little ways of cutting your bill one way or the other, but I don't see anything… that goes to core root of the problem."

So what about the insurance industry; how would they be grading the political system right now on reducing homeowners' insurance rates. Bill Beckhman of HBA Insurance, "It's a 'D' or an 'F'."

State representative Julio Robaina thinks differently. He says, "Thanks to the pressure from citizens in general throughout the state of Florida, and the media, the good guys are going to win. And that means the legislators will take on the 800-pound gorilla, and we will win."

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