Take a state that gets pounded by hurricane after hurricane year after year. Add in sinkholes, alligators, and Republican leadership, and you can understand why Florida’s property insurance industry is in shambles, with few companies willing to issue affordable policies, as WESH NBC 2 in Daytona Beach notes.
So while private companies continue to charge excessive rates that would eventually make it impossible for most homeowners to afford policies, the Republicans in the state’s legislature have decided to socialize the insurance companies’ risk by forming a taxpayer-funded stop-loss fund that would cover losses after insurance companies’ pools dry up. The law, however, would allow property insurance companies to keep their profits while making taxpayers cover their shortages.
Some mortgages, particularly those from federally-sponsored programs like Federal Housing Administration and Fannie Mae, require home buyers to secure property insurance, which can add a significant amount of money to monthly payments. Florida, which God apparently hates because He regularly hurls natural and manmade disasters at it, will still rely on the rest of America to bail it out when it has a problem. All this does is make sure insurance companies can operate profitably in the state without risk of losing liquidity.