The head of state-run Citizens Property Insurance has been barnstorming the state, talking about the need for rate hikes. Like his private insurance cohorts, interim Citizens president Tom Grady says price caps are distorting the market and stifling competition, with consumers paying artificially low prices that don't reflect the true risks of hurricanes.
Meanwhile in the real world, many strapped South Florida homeowners with no alternative to Citizens are already at their breaking point.
"I don't know what I'm going to do," a sobbing Mary Hamilton, 81, told me. "Between my home, my car and my health insurance, I pay more than half my monthly income in premiums."
Hamilton, of Pompano Beach, is on a fixed income. She said her latest renewals -- Citizens windstorm and fire/theft, and federal flood insurance – now top $5,000 a year. Her husband, who ran a pool construction firm, died last year.
She has lived in the same two-bedroom home on a canal since 1969. Hamilton doesn't want to move, but said she has no choice but to sell. She might go to West Virginia, where her children live.
"Insurance is just killing people," she said.
I've heard similar refrains a lot, from teachers who have fled South Florida to places like North Carolina and Tennessee to recent arrivals in Delray Beach who get sticker shock after paying eight times more for insurance here than for bigger homes in the Northeast.
"People are hanging onto their homes by their fingernails," said Ralph MacLean, 66, of Miramar, who is disgusted by climbing rates.
The Hamiltons bought their home for $29,000 and it's worth 10 times that now, but time and some financial mishaps have taken a toll. Hamilton said the house was damaged in Hurricane Wilma in 2005, but the insurance settlement covered only half the loss. The Hamiltons took out a home equity line. She said she got fleeced by a couple of contractors. Now she's in a hole, and scrambling.
Maybe the actuaries and insurance executives can say such is life, and that it's probably best for an elderly woman to sell and move. But the question is who replaces all the Hamiltons out there? And it's not just the elderly who'll leave, but also struggling young families and workers who have endured layoffs and flat wages.
I always get irked when the insurance industry makes it like South Florida residents are a bunch of risk-loving freeloaders who don't pay their fair share. Our property insurance costs are highest in the country. And it's still not enough.
"The cost of insurance is the cost of insurance," Grady told the Sun Sentinel editorial board last week.
But insurance isn't like a sweater, where you look at the price and take it or leave it. Anyone with a mortgage has to buy it, and it's a product you hope you never use.
When South Floridians have to pay $50,000 or more a decade to insure a home that's worth $200,000, the insurance industry might call that "actuarially sound." A lot of us call it crazy.
mmayo@tribune.com, or 954-356-4508
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