Winds of change in lawmaker's hurricane-related proposal

A proposed bill in the Florida House of Representatives would revamp the state's hurricane-related insurance strategy.

The legislation would open up the state-backed, nonprofit insurance company, Citizens, to all Florida homeowners but only for hurricane-related wind coverage. Citizens is only available to homeowners who can’t find insurance in the private sector.

Under House Bill 1213, private companies would provide all other forms of home insurance other than hurricane wind damage. Rep. Spencer Roach, R-Lee, compares his proposal to the federal flood insurance program, but on the state level and covering wind instead of floods.

“I would argue that what I am proposing is inevitable,” Roach told The Center Square. “Eventually, Florida is going to have to face the idea of universal wind coverage, much like Texas has done for wind and California has done for earthquakes.”

The private insurance market is a “boom and bust” industry, Roach said.

It’s always a boom for insurance company executives and their shareholders and always a bust for Florida homeowners who are left holding the bag when these insurance companies refuse to pay their claims.”

Private insurance companies that get deluged with claims after a hurricane are prone to financial insolvency as happened in Florida after Hurricane Ian in 2022, Roach said.

Critics have called his proposed legislation “big government socialism,” Roach said.

“My response is to remind them what Citizens is now,” he said. “It’s a state-subsidized insurance program.”

At the same time, Citizens is providing non-hurricane related insurance coverage that the private sector could provide, Roach said.

“If we take out the risk of hurricanes, the free market is going to be able to come in and pick up the bread-and-butter policies without ever having to worry about a hurricane risk,” the legislator said. “I think the insurers will flood back into Florida and I think they would make a ton of money. I think what my bill really would do is expand the free market. I think my bill is much more capitalistic.”

Other critics have said the bill would bankrupt the state government and force it to impose a state personal income tax.

“I remind them that Texas has been doing this since 1972 and they still don’t have a state income tax,” Roach said.

The wind damage coverage from Citizens would not be free, Roach added. Homeowners would still have to pay a premium for the coverage. In years between major hurricanes, those premiums could be used to build a cushion for eventual losses, he said.

“If you have periods of five, 10, 15 years without a major storm, the fund will grow into billions of dollars,” he said. “The difference is those billions won’t be given away to insurance industry executives to kind of loot the companies and leave the state. That money will stay here and when somebody needs to be bailed out, I’d rather it be the Florida homeowners and taxpayers instead of insurance companies.”