A former state lawmaker has proposed a plan to lower homeowners insurance by cutting reinsurance costs, and the proposal is garnering attention across the state.
Reinsurance is really what insurance companies pay to another company that insures them in case they have to pay a sizeable amount of claims after a major storm.
Broward County Commissioner Steve Geller just presented his plan in West Palm Beach to the South Florida and Treasure Coast Regional Planning Councils. Geller is a former state senator who chaired the National Council of Insurance Legislators and believes his plan can cut homeowner’s insurance costs by one-fourth.
The commissioner wants Congress to allow insurance companies to buy enough reinsurance to cover a worst-case scenario for a “one in 50-year” storm. Right now, they often buy reinsurance to cover a “one in 150” year to “one in 200-year” storm, which is far more catastrophic and more expensive to reinsure.
“A one in 200-year event means it has a one-half of 1% of occurring in any given year,” Geller said. “Florida has not been hit with the one in 150-year event, since the great hurricane of the 1920s.”
Geller noted Congress rejected similar plans in the past, as lawmakers from other states said their states were bearing the brunt of Florida’s hurricane risks. This time, he believes parts of the nation vulnerable to wildfires, flooding, tornadoes, and other natural disasters will reconsider, and share in a nationwide reinsurance plan.
Source: WPTV5 News
View WPTV5 News video ‘Broward County Commissioner Steve Geller’s Reinsurance Plan‘ below.
