This quote from Insurance Journal nicely sums up the gamble Florida is making with its reform measure:
But to provide relief now, lawmakers are taking a risk. If there isn’t enough money to pay claims from a megastorm like Hurricane Katrina, or a costly season with several storms, Floridians will be on the hook for billions of dollars in damages.
In such a scenario, they’d be hit with assessments on their car and home insurance policies, or taxpayers would have to pay for the losses.
I can understand why politicians in Tallahassee are making that gamble, and I suspect that it will help get the state over the hump in the current crunch.
However, I think it’s an ugly gamble (although, admittedly, I can’t think of any short-term responses to the mess that wouldn’t have been ugly). I’d hope that Tallahassee would continue to work on finding a viable long-term solution, lest they be faced with one heckuva huge bill when the next big storm hits.