Sunday, November 19, 2017
Opinion

Ruth: Time for new property insurers to perform after Irma

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Perhaps you are among the thousands of lucky Floridians who received the happy-happy-joy-joy news from state-run Citizens Property Insurance that your policy has been taken over by Big Skippy's Taco Shack and Property Insurance.

You have been assured your property insurance protection couldn't be in better hands, by a company that has been serving the state's insurance needs since, oh, about 20 minutes ago. You, dear homeowner, have nothing to fear, nothing to be concerned about, nothing to fret over.

All is well. Sleep tight, dearest soul. Remember, Citizens cares about you. And so does Fat Slappy's Mullet House and Property Insurance.

Now we'll find out just how wonderful all these take-out policies jettisoned by Citizens actually hold up in the wake of Hurricane Irma, which spread havoc across the entire state of Florida. Property damage will be in the billions upon billions of dollars.

And there you are, holding a policy issued by Madame Fatima's Tarot Card Emporium and Property Insurance. Warm feelings ensue.

To be sure, Citizens is in pretty good shape in meeting the disaster needs of its roughly 450,000 policyholders with a hefty cash reserve balance. But what about the other companies created to take on the Citizens refugees?

Many of these companies have performed less than admirably during stress tests to determine their viability.

And now in the aftermath of one of the most destructive storms in history, thousands of Floridians may find themselves in dire straits, holding an insurance policy issued by Mr. Pickles Empanada Food Truck and Property Insurance. How comforting.

You should also be heartened by the knowledge that while some of these take-out insurance companies may have a hard time replacing your garden hose, they were savvy enough to make generous political contributions to politicians such as Gov. Rick Scott. Timing is everything in the insurance game.

For years, while major insurance carriers like Allstate, State Farm and Liberty Mutual dropped policyholders as if they were lepers with a side order of the Zika, folks such as Citizens CEO Barry Gilway offered assurances the take-out companies, like Bowsers Doggie Day Care and Property Insurance, were rock-solid enterprises.

Indeed, the take-out companies were hailed as paragons of American free enterprise, as if these free market entrepreneurs all have Ayn Rand tattoos emblazoned on their keisters.

Of course the take-out insurers all looked fine on paper — until they are actually called upon to deliver when someone runs the risk of filing a claim. And now that time has arrived.

In the end, one of two things is likely to happen.

Perhaps, despite all the concerns, these take-out companies — like Kim Jong Un's Missiles R Us and Property Insurance — will rise to the occasion and prove all their critics wrong by performing brilliantly, quickly and fairly settling damage claims, making Lloyd's of London look like a back alley pawn shop. And that will be a blessing.

Or they will implode under the scope of the Irma disaster, leaving policyholders frustrated as they struggle to put their lives, homes and businesses back together simply because they were too much trouble for Citizens to serve.

What then? Well, Florida's Hurricane Catastrophe Fund, with its $15 billion in cash, will step in to help cover what Bertha's Pancakey Cafe and Property Insurance fails to address.

That free enterprise capitalism stuff always looks pretty enticing, especially when you have a taxpayer-supported safety net to catch you if you make a mess of things.

Because so many major property insurers fled so much of Florida as millions more people moved to the state, homeowners have been thrust into the conundrum of being forced to buy untested policies from unknown carriers unless they are savvy enough to decline. If you are a Citizens policyholder and received one of those letters informing you how fortunate you are to have your coverage assumed by Patsy's Eyebrow Threading Salon and Property Insurance, you couldn't get to the post office fast enough to mail off the rejection form.

As hurricanes go, Irma did its job splendidly and covered the state. Now it is time for the spawns of Citizens to do their job. Let's hope that Bubba's Medical Marijuana Clinic and Property Insurance and the like don't turn into an even bigger disaster.

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