According the the Insurance Information Institute Mississippians pay the 6th highest rates for homeowners insurance (HO) in the country in a state with 6 coastal counties of 82 total. We are one slot ahead of earthquake prone California, three slots below the Florida, the entire state of which is prone to Hurricane wind damage. By way of contrast South Carolina’s HO rates come in at number 16 despite being low and having a very developed coastline. North Carolina, with it’s famous outer banks of inhabited barrier islands comes in at 33 while Georgia, home to historic Savannah check in at 27. Texas and Louisiana check in with the highest and second highest HO rates respectively. While our good friend Sup can (and hopefully will) list the variety of reasons homewoners insurance rates vary so much from State to State for purposes of the remainder of this post I’ll operate under the assumption that in the complexity of the insurance marketpace and the associated state by state market fragmentation lies opportunity. Such as the opportunity for an insurer with a nationwide and global viewpoint to generate additional profit via ye old money change by statutory fiat. Perhaps this post will illustrate why.
We will begin with a compare and contrast between how Florida Governor Crist has handled big insurance versus our elected insurance commissioner’s genuflect and beg approach. The Mississippi GOP has chosen to directly subsidize our wind pool with the money going to buy more reinsurance. Florida, OTOH now requires transparency and learned first hand that bending over backwards for insurers didn’t mean the citizens got a good deal. Does State Farm’s announcement it was leaving Florida last week really mean Mississippi’s insurance market (where State Farm is refusing to write new policies) is “healthier” than Florida’s (where the Farm is pulling out)? Let’s start with Commissioner Chaney’s press release on that topic:
Commissioner Chaney also states in the letter that the Mississippi insurance market is in a very different and much healthier position than the Florida market.
“The Mississippi Insurance Department has worked very diligently to avoid finding Mississippi in the same situation as Florida,” Chaney said.
Do average Mississippians buy into that? Let’s hear what they have to say:
“The politicians have given the insurance companies a license to steal.”
“They are a full line insurance company. They should not be allowed to cherry pick. Our insurance commission should run them out of the state.”
“Time to take the policies for my life insurance, wifes life insurance, the 3 vehicles that are insured, the RV’s insurance and health coverage somewhere else. If enough policy holders would actually do this also, we could run them off the coast. Insurance Commission won’t do it.”
“Why are we allowing the insurance companies to hold the residents of the Mississippi hostage? For decades, we’ve paid whatever they have requested, and when the first major catastrophe hits, this is the treatment we receive. If State Farm is so adamant in their position in the way they do business in our state, why are they still here? Why are we accepting this treatment?”
The difference is striking and begs a natural question. Are coasties drinking all the koolaid or are our elected officials here in Mississippi peeing on our legs claiming rain? The press and editorial boards across Florida are giving this insurance thang a hard looksie (H/T Steve). First off is columnist Michael Mayo of the Orlando Sun Sentinel who comes to the conclusion we need a good multi peril solution in his column “How do we cure Florida’s sick property insurance system?”: Continue reading “The Florida Press Excoriates State Farm. Gov Crist Neither Captured or Impressed.”