Reading this story in the Times, and I was moved to comment…I say good for State Farm. I used to respect Charlie Crist, but somewhere along the the line he forgot what the Republican party stood for (like many of his colleagues). The state doesn’t get to price risk. Residents of Florida (and other Gulf Coast states) have tried to have it both ways for too long. You can’t live on a beach in the path of hurricanes and pay low homeowners insurance rates. To think otherwise is just dirt stupid.

The insurance industry (not my favorite by any means) deserves the right to price risk to maintain profits and reserves. If the state government of Florida thinks it can do better (and not cost taxpayers money), then they should be just fine with State Farm exiting the market. It will be an interesting experiment however, the first time that the state plan has to pay off massive claims from a Katrina or Andrew-like disaster. Obviously underfunded, they’ll have no choice but to:

  • Raise taxes
  • Raise premiums
If they raise taxes across the entire population to help pay off the claims of the fortunate few who live in harm’s way, don’t you think there will be some sort of political price to pay? I’m sure as hell betting that’s the case. If they raise premiums to account for the true cost of insurance, they’re most likely gonna find themselves squarely in the same zipcode that State Farm wanted to be in but was denied by the regulators.

I certainly hope Crist is the one to pay the political cost of this misbegotten policy – what a moron this guy has turned out to be. On a national level, those of us who choose to live in low-risk places have subsidized those who live in harm’s way. Katrina was a tragedy. Allowing New Orleans to rebuild was pure folly. I suppose we’ll be happy to pony up another $80 billion in federal (read taxpayer) relief the next time a major storm blows through and (quite predictably) wipes out the idiots who live on the beach.

If there’s a benefit to living on the water, in the path of hurricanes, floods, and other disasters – isn’t it the responsibility of those who choose to live there to pay for the costs that are associated with such a decision?