Column: On storms, our heads still in the sand

It's reallllly hard to write columns about insurance. First, the subject is complicated. Second, the only thing that people want to hear is that they shouldn't have to pay as much.

Hey, I like beatin' on insurance companies as much as the next guy. The trouble is that we have chosen to build a lot of stuff on top of a spit of sand that gets hit by hurricanes. Taking that risk costs money -- either on the front end, or the back end. Hence today's column.

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Sorry to bring up a sore subject, but we haven't fixed this hurricane insurance thing yet.

In fact, you could argue that we in Florida have just about put ourselves in the worst possible position.

As long as we continue to be lucky, our cheerful governor, Charlie Crist, can go right on being cheerful.

But if we're not so lucky ...

We are in a lousy position both in the public insurance sector, which has taken on a big chunk of the risk, and in the private sector, which is still fouled up. [Link to entire column]

Socialism for insurance companies

My column this morning raises the question again of whether Florida would be better off with state-run hurricane insurance coverage, instead of letting the private sector cherry-pick the safest parts of the state and stick the public sector with the highest risk.

I know that critics are quick to call state-run insurance "socialism." But really, we've already got socialism -- just a lousy form of it that benefits the private companies, instead of spreading the risk across the state. I went through several rewrites of this column -- the initial tone was too wonkish, I thought, and then the next version was too angry...

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Let's review the action.

(1) The insurance industry abandons Florida homeowners on a large scale.

(2) The public sector expands to take over the risk.

(3) Our governor and Legislature stick the public with even more risk in early 2007.

(4) But instead of the hoped-for cuts, many companies file for rate increases.

All righty, then!

This brings us to the current huffing and puffing. The state wants answers from Allstate. Allstate tells the state to get stuffed. The state breaks a pool cue over Allstate's head. And so forth.

That brings us up to date.... [Link to entire column]

No-fault: Back from the dead

So, the Legislature managed to pass something after all about no-fault auto insurance in Florida. No-fault insurance provides automatic coverage for personal injury in an auto wreck, no matter who is to blame.

Florida's no-fault law, which expired automatically on Oct. 1, will pick up again on Jan. 1. There will be a three-month break in the requirement for coverage, because insurance companies and regulators said they had been planning for the Oct. 1 expiration and couldn't throw it into reverse on a dime.

The Legislature did a little bit more than just renew the old system, which was criticized for allowing too much fraud and overuse. There are some new cost controls for medical providers and a few more rules. On the other hand, the law doesn't put any different limits on lawyers or legal fees.

A lot of credit goes to state Sen. Bill Posey, R-Rockledge, and state Rep. Ellyn Bogdanoff, R-Fort Lauderdale, who led the efforts in their respective chambers to get something passed. But it took a lot of effort from a lot of other people too.

A friend asks: Well, do you take back any of your criticism of last week that the Legislature is institutionally weak?  Nah. Waiting for years to do something, and then doing it only after the law had actually expired, created an artificial crisis. Maybe that's the only way to get anything passed. It still would be good to see a more systematic re-assessment of no-fault, especially on the question of cost controls.

Footnote: This was a pretty major defeat for State Farm, the state's biggest insurer, which had already filed and announced to its policy-holders a 16-percent rate decrease, anticipating the end of no-fault. Hard to gripe about the Wicked, Powerful Insurance Lobby if this keeps up...

What State Farm OUGHT To Say

In the middle of reading this morning's news about State Farm dropping another 50,000 policyholders in Florida, I sat up and laughed out loud at this quote from company spokesman Chris Neal:

"This is not an action we take lightly. But if there is any good news, we are still committed to Florida."

Still committed to Florida? STILL COMMITTED? Under what circumstance is an insurance company canceling 50,000 policies allowed to say that?

If the man were on a vaudeville stage, he would be pelted with vegetables. If he were at the Apollo, he would get the hook. If he said in the town square, he would be run out of town on a rail.

This is what the company ought to say:

"Today we are announcing that we will no longer be a Good Neighbor to another 50,000 Florida homeowners. We are canceling them as of Jan. 1. We are abandoning them. We know that this is going to cause them hardship. We know that most of them will be dumped into the Citizens pool and will have to pay more money.

"This is a decision of hard dollars. We still think we have too much risk in Florida. We will keep reducing our risk as long as we think it is justified. But we are fully aware that this is a contradiction of the advertising, of the PR, of the way that we have always tried to portray ourselves. We also know that we have a lot of gall continuing to ask Floridians to be State Farm customers for other lines of insurance. But we are going to keep doing it anyway, because in the end, we can."

The Readers On No-Fault...

Excerpted reactions to today's column on no-fault insurance, which expires in Florida Oct. 1:

We should keep no fault in Florida.  To eliminate it will put hospitals in a financial bind and who will pay for the hospitals' cost?  People who do have health insurance will see thier premiums increase to cover the hospitals' shortfall! -- Joanne Hannon, Pinellas Park

Is the "No fault area of insurance" a euphemism for clinics specializing in maxing out PIP as quickly as possible? I prefer the term "PIP clinic". I think we would all be better off if they found a job that actually contributed something economic. -- Ken

Boo Hoo..... PIP is not working, the only people that it does work for are the people that are staging accidents and the atty's that rep them. Get rid of PIP. Let the attys work for there lunch now. -- Fraud

As an adjuster, the issue is not eliminating no-fault, the issue is putting controls in place that eliminate fraud, lower the overall cost of treatment and determine if the person is really injured. Removing no-falut coverage is not the answer. -- Margaret

What, PIP has been somewhat successful? Sounds like a call to action for the Legistlature to screw it up! -- Warren

A good friend was a hit and run victim. She was injured and found the other driver who had no insurance nor license nor was her car registered. My friend only has Major medical insurance. No fault saved her! Please keep it alive! -- Kay

Friday Morning: Bill Young, Cable Wars, Insurance, Shooting The Moon

If history teaches us anything (to paraphrase Michael Corleone), it is that anybody can be beaten in politics -- but they usually aren't. It is hard as heck to defeat a sitting politician, especially one as veteran and entrenched as U.S. Rep. Bill Young, R-St. Petersburg.

Can the Democrats successfully target him, as this morning's article reports they are doing? Sure. But here's how NOT to do it -- sneer at him, call him nasty names, try to whip up the usual Five Minute Hate, and expect the moderate and reasonable voters of Pinellas County to jump right in. I would use the "He's A Nice Old Guy And We Are Grateful But It Is Time And Besides Did We Mention He Is In The Same Party As Bush'' approach.

But, why win when you can smear? The motto of modern party politics is: Us good, them bad. State Democratic chair Karen Thurman set the tone on Thursday, saying Young cares more about "public relations" in the Army hospital scandals than "wounded soldiers falling out of their beds and sleeping in their own urine.'' Very nice.

Elsewhere:

* Don't be fooled by this bogus promise in Tallahassee of "repealing" the big 2003 telephone rate increase. The big hikes have occurred already and can't be taken back. The repeal would only cover future increases that probably weren't going to happen anyway -- the phone companies got what they wanted. More about this fight in the Legislature between phone and cable companies in my column coming Sunday.

* Do we have enough proof yet that the Legislature's special session on insurance rates didn't fix the problem?

* All I know is what I read in the papers, but this mooning seemed a little more than innocent and youthful exuberance. A good old-fashioned drive-by would be one thing...

The Penny Triumphant, And Other Stories

Congratulations to supporters of the Penny for Pinellas sales tax, which passed handily in Tuesday's referendum. A strong majority of those who turned out to vote agreed to extend the 1-percent sales tax to 2010. Not that many people voted (16 percent) but the 57-43 margin was entirely decisive.

Now for the sour grapes: Once again, in this election we had the hand of local governments taking sides in elections, and spending tax dollars to advocate a particular outcome. To me this is the most dangerous, insidious, anti-American idea possible. There's a bill in the Legislature that would outlaw it, but it is coming under heavy opposition, naturally, from local governments. It's one possible topic for my column tomorrow.

Other quick Wednesday morning notes:

* You know how the Legislature "fixed" our insurance mess in its special session a few weeks back? Check out Jennifer Liberto's front-page story today about how the insurance industry is trying to get some of that undone. One example: Instead of having to pay claims within 90 days, the industry wants to change the rule to say it has to pay within 90 days of.... when it decides to pay! Good grief.

* Voters in Clearwater finally found a downtown waterfront plan they liked, spending almost $11-million to build 129 boat slips, a promenade, a boardwalk and a fishing pier near downtown's Coachman Park. And in fractured St. Pete Beach, two critics of City Hall, Linda Chaney and Harry Metz, got elected to the City Commission, which means everything is now officially their fault.

What? Rates Didn't Go Down? Shocking!

Gooooood morning and happy Thursday. I liked Jennifer Liberto's story on page 1A this morning a lot because it follows up and holds feet to the fire. Our fast-paced, 24-hour e-society doesn't reach back often enough to compare What Was Said to What Actually Happened. (I am talking about us in Florida, but if you want to apply it to Washington, be my guest.)

Liberto's story is about Florida's LAST big insurance "crisis," that one involving doctors and malpractice. Naturally, the doctors blamed the lawyers for it. The anti-lawyer Legislature cracked down. But as Liberto writes:

Four years after the Legislature capped certain types of pain and suffering damages, Florida doctors still pay the highest malpractice insurance rates in the country.

Meanwhile, she reports, insurance profits are high even though lawsuit settlements have been capped and claims are down. Why, imagine that!