[crosslink]

"The state of Florida is giving them a discounted reinsurance and the savings must be passed on to customers."

Right, The reinsurance is backed by state bonds with 1.35 billion outstanding. This is not reinsurance but a shift for all losses from solvent free market insurer's to the state who backs the bonds. Currently Citizens has a negative surplus of 175 million and they are cutting the rates. This deficit is finance by more gov bonds. This rate cut will drive most of the buyers to Citizens which will have to issue more bonds if a large loss occurs.

Bottom line is if a huge storm hits you and your state will be forced to raise taxes to pay the bond holders.

Markets work even in insurance unless the government is run by a RINO.

[Moonman62]

Bottom line is if a huge storm hits you and your state will be forced to raise taxes to pay the bond holders.

True, but it'll be a big poop sandwich for everyone if more big storms hit the state, regardless. Effectively, the risk is being spread throughout the state, and the costs to a future time if they occur. Those in less risk areas can say it's unfair, but I don't hear them complaining when they share in the big revenues that come out of the coastal areas.