There’s one unpleasant and unavoidable fact underlying the seemingly endless debate about how to fix state-run Citizens Property Insurance Corporation: Many policyholders are paying dramatically insufficient insurance rates that don’t cover the true risk on their homes.

To borrow a phrase now common on the national political landscape, this is Florida’s fiscal cliff. If a major hurricane hits the state, we would be subjected to serious hurricane taxes on our personal and business insurance policies that would heap grave economic damage on Florida.

There’s common agreement that the answer is to shrink Citizens, but, in my opinion, some want to go much too slowly. The problem has become so bad that over 30,000 policies a month flood into Citizens. Many Citizens policyholders are passing up private insurance coverage and opting for state-sponsored insurance because it’s cheaper.

Citizens is moving thousands of policies back to the private market, but what good is that when the inflow of new policies matches or exceeds the outflow? We are aimlessly spinning our wheels.

Unfortunately, our current public policy is to allow consumers to obtain coverage in Citizens at inadequate rates and then to cap their rate increases at 10 percent annually to avoid financial shock. Of course, no one ever wants to pay higher insurance rates, and Floridians are still recovering from a deep recession, but we’re digging ourselves an ever-deeper financial hole that will be tough to climb out of when the wind blows again.

Last spring, when Citizens’ board considered lifting the 10 percent cap for new business, Florida CFO Jeff Atwater said it would be beyond the Legislature’s intent to do so. If this is so, then state lawmakers should fix this problem in the coming 2013 session.

New policies and affluent homeowners already in Citizens should be priced at the actuarially correct rate so that Citizens’ reserves needed to pay claims down the road will be sufficient. Otherwise, all Florida policyholders will be taxed to make up any shortfall in Citizens’ reserves, and that’s wrong. This undercuts the private market and prevents desperately needed private insurance capital from coming to Florida.

The Citizens Board of Governors and the Legislature need to address these issues head on. The sooner we get all Citizens customers paying correct rates, the sooner we will be able to pull back from Florida’s fiscal cliff.

John Wood, state representative, Florida House of Representatives, Winter Haven