As appeared in the South Florida Sun Sentinel.
Reinsurance is the insurance purchased by insurance companies. Reinsurance is global in nature — hurricanes in Florida, earthquakes in Italy, terrorism in London, and typhoons in Asia are all possible, but the risks are diversified. 87% of Florida private reinsurance for homeowners is from foreign companies. The Border Adjustment Tax (BAT) being discussed in Washington would place a 20% tax on these foreign companies. Florida Tax Watch estimates that this would directly increase homeowner’s insurance rates by about 10%, and by 14% to 31% once the effects of diversification are included. Floridians must contact their Congresspeople to oppose this increase.