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DAMAGE CONTROL

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By CHRIS NEAL

Published: October 14, 2007

As Floridians, we know we live in a place where hurricanes can and do hit. We know our homes and our property are at risk. And the reality is that many Floridians are struggling with the high cost of property insurance.

At State Farm, we know there must be a shared responsibility to solve our property insurance crisis. That's why we're working with state regulators to provide some immediate market stability for our nearly 1 million customers - by lowering our homeowner's insurance rates an additional 2 percent.

We hope our cooperation will lead to better working relationships between the public and private sectors.

However, finding a solution will take the collective efforts of government, insurance agents, insurance companies (including Citizens), policyholders, builders, lenders, real estate professionals and many others. And we must recognize that hurricanes are the true source of our market woes, not insurance companies.

Overregulation and increased reliance on state residual markets, like Citizens, only reduce competition and increase costs over the long run. Hurricanes are an economic problem in need of an economic solution.

One of the biggest mistakes we can make is to continue to discourage capital investment in the Florida insurance market. Fewer private dollars are available to pay hurricane claims, and a greater burden is placed on all Floridians.

Assessments stemming from Citizens, the Florida Hurricane Catastrophe Fund and the Insurance Guaranty Fund are still being charged to our citizens from 2005's storms.

One of the true solutions is stronger home construction through hurricane mitigation and stronger building codes.

Florida already has taken great strides in this area, and our state leaders should be commended.

Earlier this year, the state provided $250 million in funding to the My Safe Florida Home program for free home inspections and matching grants. For our part, State Farm now offers greater discounts to policyholders who strengthen their homes, and we were one of the first companies to do so.

We also need policymakers at the state and local level who will seriously address growth management. Our coastline continues to be developed, leading to greater and greater loss exposure for all Floridians.

Finally, we believe no state can go it alone. That's why we support a National Catastrophe Fund, also supported by our Florida leaders in Congress and Gov. Charlie Crist.

Unfortunately, there are no 'quick' fixes. It is a sad reality that property insurance will always be expensive in the Sunshine State. However, Floridians deserve more choices for their insurance needs.

State Farm remains committed to serving our customers in Florida and to working with state officials as we develop ways to end Florida's hurricane crisis.

Chris Neal is public affairs manager for State Farm.

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