Iowa had ethanol. Florida has low-cost hurricane insurance. Just as almost none of the major candidates could resist the siren call of ethanol in Iowa (the exception was John McCain, but then he did a pretty good job of resisting the North Vietnamese, too), some candidates are having trouble saying no to calls for what would in effect be federal subsidies for hurricane insurance in Florida.
After the last major hurricane hit Florida, insurance companies raised their rates for hurricane coverage in Florida. The problem is that more and more people are moving to Florida and building expensive houses right next to the water. Of course, that means big claims for the insurance companies when hurricanes hit. The insurance companies decided, to protect themselves, they needed to raise rates.
People in Florida like living near the water, but they don’t like paying for privilege, so Florida’s governor got the state legislature to pass a law providing for low-cost hurricane insurance backed by the State. It sounded great, but then even the governor started trying to figure out where the State would get the money to pay all the claims the next time a really big hurricane hits. The problem was that the State was not collecting enough money in premiums. And when the next hurricane does hit, the State is not going to have a lot of spare cash laying around to bail out the hurricane insurance fund.
So, like too many Americans all over this country, the governor of Florida and other people from Florida came up with the idea of getting the whole country to help pay for hurricane claims in Florida if, and when, the state fund runs out of money. Baloney – and I don’t mean Oscar Mayer. If people want to live in an area where hurricanes are likely to hit, then they have to either take the risk or pay the real price for hurricane insurance.
It’s actually a lot like California. According to an article in the Chicago Tribune a couple of years ago (March 22, 2006), 86% of the homeowners in California did not have earthquake insurance. People said the insurance was too expensive, and anyway, they figured the government would bail them, if anything ever did happen. According to the Tribune:
"In the insurance industry that mind-set is jokingly known as the ‘Air Force One Solution’ – the notion that the president surely would fly over a disaster zone dropping $100 bills from his plane."
Now the people in Florida are taking the same tack, and their politicians are trying to use Florida’s primary as the way to get presidential candidates to support their position.
Let’s hope our presidential candidates will have a little more backbone in Florida than they did in Iowa. And, if they don’t, then maybe those of us who live in Illinois can demand snow shoveling insurance when primary time comes here.
[1/26/08 (2:50 p.m.): Corrected typographical error in quotation from Chicago Tribune.]
[2/2/08 (12:05 p.m.): Corrected typographical error in last paragraph.]
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