Property insurance reform in Florida

Alex Sink, our State Financial Officer, says the property insurance policies dropped by Nationwide this month is not a sign that insurance reform failing to live up to it’s promise. She says the State Farm move last month isn’t a sign either. “This is an opportunity for Floridians to shop around for a better policy.” So says Alex Sink.

I voted for Alex Sink, and now I’m disagreeing with Alex Sink. Nationwide and State Farm are two of the big property insurance carriers in Florida. When they stop writing policies, or dump some of their existing policies, the supply of insurance goes down, while simultaneously increasing demand (unless those dropped policies belonged to dead people). Economics 101 says this usually results in an increase in price (in a free market… woo-hoo, free market!). Since insurance reform was passed with the expressed goal of: 1) keeping insurance costs for homeowners under control, and 2) reducing the risk for private insurers so they would continue to write (and keep) policies, then you’ve got to admit it looks A LOT like it’s not working.

Give the gift of words.