Florida pays more for insurance than Texas, all but 9 nations

Ah, Florida. The sun. The sand. The insurance bills bigger than whole countries pay, including India and Russia.

Somehow the brochures tend to leave out that last part.

Floridians collectively pay $108.1 billion annually in insurance premiums, more than Texans and the residents of all but nine nations, according to statistics from the National Association of Insurance Commissioners. They’re included toward the end of a recent Fast Facts release from the state’s Office of Insurance Regulation.

By this accounting, fewer than 20 million Floridians pay more than the 1.2 billion people of India, $72.6 billion. They shell out more than twice the premiums of vast Russia, $43.3 billion.

Florida Insurance Commissioner Kevin McCarty, immediate past president of the National Association of Insurance Commissioners, was not available to discuss why state premiums seem to rank so high in the world, a spokeswoman said.

Various cultural and financial factors can account for differences in the size of insurance markets, others say.

“In India, it’s dramatically different,” said Richard Rossow, director for South Asia for international consulting firm McLarty Associates in Washington, D.C. , a member of US India Business Council. “Certainly some people are doing well, but hundreds of millions of Indians don’t own a car or a home worth insuring.”

He said he’s been to India 40 or 50 times in various roles, including with a large life insurer. Per capita income is lower, so Indians generally have less to spend on insurance. They spend a comparable percentage of Gross National Product on life insurance as Americans, but far less on property and casualty insurance, about 0.7 pecent compared to 4.5 percent in the United States, he said.

So in one sense, perhaps, it’s a measure of prosperity. It takes a certain level of affluence to afford things like nice cars and homes near the water — and to live in a place where it is routine to have insurance for all sorts of things such as homes, cars, life and health. And hurricane risk and health costs with an older population may tend to be higher in a state like Florida.

Still, Floridians pay a world-class insurance bill.

The United States as a whole is the world’s biggest insurance market at $1.7 trillion. Break it up by states, and only California and New York are bigger than Florida.

With 5 million fewer people than Texas, Florida pays almost $2 billion more in premiums. Florida residents pay about $5,500 per capita for insurance, compared to just over $4,000 in Texas.

“Florida is the hurricane in the room — our insurance costs blow everyone else away,” said Chip Merlin, who owns the Merlin Law Group in Tampa, which often takes insurers to court. “As a state, we simply have to be obsessed with making public policy and laws which support property insurance that is not only available, but also affordable. We still have a long way to go.”

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