Multiple Deductibles Among Key Issues Being Discussed By Florida Legislators

December 13, 2004

Major insurance issues are on this week’s Florida Legislature agenda in Tallahassee. In long-awaited special sessions, which begin today, even if legislators stick to key issues, it remains to be seen how much they accomplish.

Key topics on the agenda include: A plan supported by state insurance officials which would send checks to thousands of homeowners who paid double-deductibles during the four-storm hurricane season; eliminating multiple hurricane insurance deductibles for property owners affected by more than one storm; preventing the loss of insurance coverage while awaiting repairs; and providing tax breaks for homeowners whose properties have been destroyed.

Gov. Jeb Bush suggested the state should ante up a maximum of $9,750 for each homeowner who had to pay more than one deductible. More than 29,000 Florida homeowners paid an estimated $54.5 million in multiple deductibles after the storms. Legislators will have to implement a reimbursement plan that doesn’t have unintended consequences.

Tom Gallagher, Florida Chief Financial Officer, is pushing for a single-season hurricane deductible under which property owners hit by multiple storms would pay only once out-of-pocket. He also wants to allow policyholders to choose their hurricane deductible, letting those paying higher deductibles to have to pay lower premiums.

Kevin McCarthy, Florida Commissioner of Insurance Regulation, asked the Florida House Insurance Committee, to urge legislators to focus on the most pressing matters facing more than 1.2 million commercial and residential property owners and leave less urgent concerns until the Legislature meets for its regular sessions in March.

McCarthy cautioned lawmakers not to make sweeping changes in a short period of time that they could regret later. He pointed out that post-Hurricane Andrew insurance regulations took several years to configure and are still being revised.

Reforms made after Andrew allow insurance companies to assess deductible payments for each storm, a cost-saving provision lawmakers and industry officials agree did not contemplate the consequences if a homeowner was hit with multiple hurricanes in the same year.

A number of topics will most likely have to wait until March, they include: Solving financial problems with Citizens Property Insurance; the state’s catastrophic hurricane insurance pool; setting aside money to weather a more serious storm; providing regulatory relief for insurance companies to minimize potential premium hikes; and how to keep overall property insurance rates from skyrocketing.

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