Florida CEO Tom Gallagher affirmed that the Legislature has approved a measure laying the groundwork to enable residents to establish hurricane savings accounts and protect those accounts from creditors, but, Congress would need to create the accounts under federal law and grant a tax-exempt designation.
Hurricane savings accounts would give Floridians the opportunity to put money aside to prepare for the financial impact of a catastrophic storm, Gallagher explained. He said the accounts would be structured like health savings accounts and individual retirement accounts, a tax-free hurricane savings account could cover current and future hurricane-related expenses. The money deposited, plus interest earned, would be tax-deferred. Unused balances would roll over from year to year.
Gallagher said the ceiling on the accounts could be twice the amount of the individual’s deductible. The money could only be withdrawn to cover qualified hurricane expenses, tax-free.
Qualified expenses would include deductibles, uninsured losses such as docks, flood damage and structural upgrades for future storms.
“As balances accumulate tax-free, consumers would also have the option to purchase higher deductible policies which would result in lower annual premiums,” Gallagher added.
The legislation (SB 660) adds hurricane savings accounts to the types of assets protected from creditors. Under the legislation, the amount that may be protected from creditors is limited to twice the deductible of a person’s homeowners’ insurance.
The bill next goes to Gov. Jeb Bush for his signature.
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