By Lawrence A. Hunter
Two years ago, Gov. Crist dared insurance companies to leave Florida if they couldn’t do business under regulations that essentially forced them to lose money. Last week, State Farm Insurance Company, Florida’s largest writer of homeowners’ insurance, announced it is going to discontinue writing homeowners’ policies in the state.
This saga began several years ago when the governor and the Legislature began playing chicken with Mother Nature and the laws of economics by imposing price controls on homeowners insurance. This prevented insurance companies from charging homeowners actuarially sound premiums that accurately reflect the risk of storm damage. Almost immediately, insurance companies began fleeing the state, and firms that remained dropped thousands of homeowners’ policies that had suddenly become actuarially unsound under Florida’s price controls.