A half-billion-dollar aid package, including property and sales tax rebates to reimburse residents who had to pay more than one hurricane deductible, was approved by the Florida Legislature before it adjourned today.
The Senate and House unanimously approved rebates of up to $1,500 for Florida homeowners who paid property tax on homes they couldn’t live in after they were destroyed by hurricanes.
Lawmakers will also borrow $150 million from the Florida Hurricane
Catastrophe (Cat) Fund and provide financial assistance to consumers with grants up to $10,000. The Cat fund will be repaid over five years through a $30 million a year increase in premiums that insurers pay to the fund beginning in 2006.
In addition, the bill establishes a program in which homeowners would pay only one hurricane deductible in the future. If homes were damaged by more than one hurricane, homeowners would be responsible only for the lower homeowners policy deductible. For most consumers, hurricane deductibles are two percent of the home’s insured value, while deductibles for other losses are typically $500.
“The special session was a success because state lawmakers wisely maintained a narrow focus and deferred more complex issues until the regular session next March,” said William Stander, regional manager for the Property Casualty Insurers Association of America (PCI). “It was critically important that the burden of administering and paying for the reimbursement program not be placed on insurers.
“One of our top goals for the special session was to help legislators find solutions that did not needlessly drive up costs for consumers,” Stander explained. “While we would have preferred that the program be paid for out of general revenues, lawmakers agreed with our position that the reimbursement program should be administered by the state and established the Department of Financial Services (DFS) as the agency to run the program.”
As part of the reimbursement program, insures will be required to provide DFS with information from their claims files and to notify consumers who paid multiple deductibles about the reimbursement procedures.
“Although the Office of Insurance Regulation estimated that the issue of multiple deductibles may have affected approximately 30,000 consumers, once the program begins we can expect consumers to file new claims in order to take advantage of the program,” said Stander.
“Help is now on the way for more than 30,000 Floridians financially devastated by multiple hurricanes thanks to the Florida Legislature,” Tom Gallagher, Florida Chief Financial Officer said. “The law approved by state lawmakers directs the Department of Financial Services to administer a deductible reimbursement program.
“My goal is to quickly get these dollars in the hands of impacted homeowners who so desperately want to get their homes repaired and rebuilt,” he said.
State law allows insurance companies to sell policies that include an out-of-pocket deductible to be paid on damage from each named storm in the same season. The measure would change the law so that policyholders will pay only one deductible in each future hurricane season.
The assessment would be levied on all insurance lines except medical malpractice and workers’ compensation through property and casualty carriers, but also effect auto and commercial insurance. The effects of the measure could increase the cost of automobile and residential insurance by about one-half percent.
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