As a longtime Florida resident, I’ve witnessed the harmful energy of hurricanes on the lives and properties of numerous Floridians and others throughout the Atlantic and Gulf coasts.
Hurricanes can pack such huge energy that they’ve actually altered the pure panorama of Florida and different areas. In 2012 Superstorm Sandy modified the New Jersey shoreline ceaselessly. And Hurricane Charley in 2004 created a brand new cross between the Gulf of Mexico and Charlotte Harbor on North Captiva Island.
Along with the tragic lack of lives and untold property harm, hurricanes disrupt the fragile steadiness of the pure ecosystem and wreak havoc on the social, political and financial cloth of our nation.
Florida’s vulnerability to frequent hurricane exercise has had a crippling affect on the affordability and availability of property insurance coverage within the state. Insurance coverage not solely protects Floridians and others from monetary spoil, however offers the catalyst for the financial restoration within the aftermath of a harmful storm.
From Andrew to Katrina to Michael – and with many storms in between – we’ve seen how Mom Nature’s wrath can pressure our insurance coverage ecosystem. However it isn’t simply the climate that may throw this steadiness out of kilter. Oftentimes, well-intentioned however ill-conceived public coverage can exacerbate an already strained system.
The very last thing People wants proper now could be a coverage initiative that throws insurance coverage markets right into a maelstrom, however that’s precisely what an obscure (till not too long ago, no less than) provision of the Biden Tax Plan threatens to do. Derisively dubbed the “Hurricane Tax,” the president’s plan features a proposal to extend tax charges on reinsurance.
As readers of the Insurance coverage Journal know, insurance coverage firms purchase reinsurance on high-risk insurance policies, usually on the worldwide market. Below the Biden plan, taxes on this reinsurance would enhance, which might, inevitably, be handed all the way down to shoppers.
This example is unhealthy sufficient in locations that aren’t vulnerable to main climate. However in Florida, the ache may very well be significantly acute. In fact, elsewhere within the nation, there are totally different dangers – fires within the west, snowstorms within the north, extreme climate within the heartland. They’d all really feel it, a technique or one other, by means of insurance coverage premium will increase.
Throughout my 13 years as Florida Insurance coverage Commissioner, and since then, I’ve seen the affect of failed public coverage – and the proposed Hurricane Tax is especially egregious.
The far-reaching results of this tax usually are not restricted to property insurance coverage. For instance, personal mortgage insurance coverage (PMI) – most frequently utilized by first-time homebuyers – faces the identical kinds of price will increase. Make no mistake, the lots of of {dollars} a yr of elevated value for owners may be the distinction between making ends meet or making onerous decisions.
All of that is to say: The insurance coverage equilibrium is delicate. The very last thing People wants is a public coverage that will increase charges on owners and companies.
I urge state congressional delegations to say their affect in Congress and take away this insidious tax from President Biden’s bigger tax plan.
Mom Nature is superior sufficient on her personal – we don’t must create a brand new, man-made disaster that threaten the livelihoods of struggling households.
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