By Sen. J.D. Alexander, Special to the Times
Wednesday, October 7, 2009

Floridians want straight talk from public officials. They want to be able to form opinions on the direction our state's headed with all the facts on the table.

That's why I recently insisted that a required report on Florida's long-term financial outlook must disclose that our state faces billions of dollars in unfunded liabilities if it's hit by a major hurricane.

This disclosure isn't pleasant reading. But as chairman of the Senate Ways and Means Committee, I know that Floridians want and need to hear the truth.

So here it is: Our two state-run giants in the homeowners insurance market — Citizens Property Insurance Corp. and the Florida Hurricane Catastrophe Fund — are seriously underfunded. And it's the very people we aim to protect who will suffer the most if a storm hits and exposes the issue.

Combined, these two entities could wind up $14 billion short of the cash they will need to pay claims if a strong hurricane hits a metropolitan area.

How would Florida pay for this? The answer is that you — the insurance policyholder — would be asked to foot the bill, through assessments on your home, auto, boat and business policies.

It's complicated how we got here. But it's fair to say that the extreme risk of hurricanes we face each year, along with public policies that have plunged our state too far into the home insurance market — while chasing away private insurers — are two major factors.

I asked for the sobering disclosure on Florida's unfunded hurricane liability to be inserted into the Legislative Budget Commission's long-range financial outlook. The outlook is, in essence, the Legislature's annual report to Floridians about our state's financial condition.