Most home insurance policies cover wind damage, but flood damage usually requires a separate policy. (Photo: Mark Humphrey, AP)
TALLAHASSEE, Fla. -- Several Democratic state senators are calling on Gov. Rick Scott to ask governors of other states to form a regional compact that would share the risk of hurricane damage.
Sens. Jeremy Ring, Chris Smith and Jeff Clemens say Republican-backed measures to address soaring property insurance rates have not worked in recent years. They believe the only way to fix Florida's insurance market is to spread the risk among multiple states in the Southeast, and perhaps along the Atlantic coast too.
Sen. Ring, D-Margate, said the property insurance issue has become larger than Florida and creating a regional compact on hurricane insurance would help reduce the growing financial burden on Floridians.
"We can offset some of our risk. We probably would have to hold onto most of the risk -- we have the most miles of coast, but to offset some of it. Everyone in the past has talked about a national catastrophic fund and the question may come, why don't we call for that? That would be great. I just don't see that as actually being practical. I can't imagine with the inaction of Congress these days that we could get something like that through."
Sen. Smith, D-Ft. Lauderdale, calls Hurricane Sandy a "game-changer" on the issue of property insurance.
He said the billions of dollars in damage from Sandy taught a lesson to residents in states all along the Atlantic Coast.
"Sandy showed the entire East Coast, the Atlantic seaboard, that we all have some risk. Yes, Florida has more risk than others but it opened the eyes of governors and residents up and down the Atlantic that there is risk for everyone."
Ring said Florida can either stabilize rates or the risk, but not both at the same time. So he believes this broader, multi-state approach is the only solution.
"I'm not convinced there is a comprehensive Florida solution to our property insurance crisis."