The Anti-Crist

In the August issue of Governing, I described how South Carolina's response to the coastal property insurance crisis differs from Florida's. This was actually quite easy: Officials in South Carolina love talking about how they are not like the Sunshine State.

Prompted by populist governor Charlie Crist, in January Florida cut rates at its state-run "insurer of last resort" and allowed it to compete with the private sector. Translation: More Floridians will be getting their home insurance from the state of Florida.

South Carolina Governor Mark Sanford is the anti-Crist and he's not ashamed to admit it (although I suspect some insurance industry representatives think that Crist is the anti-Christ). When Sanford signed his state's stab at coastal insurance reform, he declared, "This bill sends a strong signal to the insurance industry that South Carolina has rejected the government-centered approach to addressing the insurance crisis that has been adopted by states like Florida..." Crist and Sanford are both Republicans.

I spoke to Scott Richardson, Sanford's director of insurance for the state. With a little prompting from me, he happily took a couple of shots at Florida, noting that when a state government acts as insurer, it's that state's taxpayers who bear the financial risk in a disaster. Of Florida, he said, "Their citizenry is on the line for just about $15,000 per person."

South Carolina's legislation gave tax incentives for insurance companies to return to coastal areas. That approach, which Louisiana also is trying, is designed to restore private-sector competition and lower rates. Critics call it corporate welfare.

South Carolina also approved a small expansion of its insurer of last resort, but where Florida is lowering rates for costumers in the state-run insurer, South Carolina is raising them by 35% on average. The message: If you live in a hurricane-prone area, you're going to pay for it.