Which Citizens are They Working For?

BRADENTON -- Sinkholes have been an ongoing problem for decades. On the Florida sinkhole website, you can see just how many are out there and their reported location. Unpredictable as to where they will pop up next, when one hears the word "sinkhole" it sort of sends a nerve up their spine. In recent years, insurance companies have been struggling with just how to deal with sinkhole coverage. But a new insurance Bill just passed by the state legislature, SB408, allows insurers to raise rates far beyond what the law currently permits.

Citizens Property Insurance, the states funded property insurance program, has proposed an increase in premiums of up to 428 percent  throughout the state. In areas considered high risk, some companies predict increases of over 2,000 percent, presenting a serious problem to those living anywhere near them. By the Citizens' own admission, the majority of  these claims were fraudulent.  

Governor Rick Scott  said he was not surprised, telling the Tampa Tribune, "Since before I was elected I have warned that Citizens is in need of serious attention and would soon have to face a day of reckoning." He then added "This proposal is the unfortunate result of politicians playing politics for too long by keeping rates artificially low." Is something missing here, like a regulatory board with subpoena power and access to a Grand Jury? What appears ominous is that the Governor will sign the bill if it makes it to his desk.

If Citizens collected $32 million in premiums and paid out $245 million in claims, asserting the majority of the claims were fraudulent, why are they using this example to index the increase in premiums? And moreover, is the governor suggesting they do so, instead of putting together a task force that can determine just how many are legitimate and just what the real cost of sinkholes might be? Would it be fair to the homeowners to not establish a genuine assessment? Is this not a criminal matter? And if in recent years sinkholes have skyrocketed, would it not be prudent to investigate why?

On the sinkhole website, Polk and Lake counties seem to have had by far the most sinkholes -- more then all of the other counties. And it may not be coincidental that they have a large amount of farming and mining too. Both of those industries use more water then their surrounding towns. Over-pumping does contributes to sinkholes. Just what circumstances are factored in to determine such an increase in premiums? How many families will go broke or lose their insurance all together for what may be misplaced blame or a passed on cost of a profitable business?These premiums will equate to billions of dollars in increased revenue for insurers. The margin of profit for the insurance industry runs from 15 to 20 percent. That's a lot of revenue into the industry's coffer and out of the peoples' pocket, without a thorough investigation.   

Frustrated consumers are baffled by skyrocketing costs across so-called regulated induistries that continue to grossly outpace flat wages and wonder how regulators can justify such massive increases for hugely profitable corporations. Florida Power and Light is supporting a bill moving through the legislature that will allow an automatic 2 percent raise in rates so that they can work on solar projects. That could equate to somewhere between $10 and $20 million a month, but to do what? To make sure they spend some of it on a solar farm that will be placed far from wherever the electricity is going, so that it travels through their lines and guarantees no savings to their customers? With FPL getting the money "up-front" consumer advocates worry that savings will never reach the customer. Judging from the campaign disclosures, it is clear that these industries have been supportive of government. It might be time for taxpayers to ask whether government is being too considerate of them, while forgetting who they truly work for.