Fla. Insurance Bills Passage Could Exempt Surge Flood Damage Claims

April 25, 2005

Insurance bills nearing final votes in the Florida Legislature could provide insurers with a broad exemptions from paying homeowners with storm-surge flood damage according to provisions of the state’s 100-year-old valued policy law.

“To force us into the flood business is contrary to what our policy covers,” State Farm lobbyist Mark Delegal argued to a House committee last week, flanked by local State Farm agents from lawmakers’ home districts.

Delegal and other insurance lobbyists predict rate increases and cuts in the number of policies offered if lawmakers don’t give in.
Senate Banking and Insurance Chairman Rudy Garcia said he finds it hard to strike a balance between threatened rate increases and keeping insurance coverage meaningful.

“Throughout the years we thought we were protected for more perils than we were,” Garcia told the Fort Myers News-Press. “It was shocking.”

Otherwise vastly different House and Senate bills both contain the exemption, along with nearly two dozen other insurance-cleanup measures. The bills contain no direct impact on rate increases.
House and Senate floor votes are scheduled this week, but the chambers are unlikely to concur. Differences will be left to the horse-trading politics of a conference committee or the negotiations of leaders in the last few days before the session ends May 6.

Insurers were asked to wait for the regular session to address the multi-peril exemption and expansion of the consumer-funded Florida Hurricane Catastrophe Fund.

While the industry gets both, the sweeping House and Senate bills also promise consumers more disclosure of what their policies cover, and protection from coverage cancellation while they’re making storm repairs.

The Senate bill goes further yet, calling for standardized policies, uniform rating territories, broader state regulatory powers, deadlines for paying claims and end to the practice of holding back some payment for damage.

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