Florida Legislature To Take Up Deductible Issue

By Matt Brady

NU Online News Service, Dec. 8, 3:49 p.m. EST?Florida lawmakers, in a special session Monday, may consider how toreimburse homeowners who must pay multiple deductibles on theirinsurance claims for multiple hurricane damage.[@@]

"The members of the Florida House and Senate have identifiedseveral issues that must be addressed before March, particularlyfinancial needs resulting from the four major hurricanes that hitFlorida this summer," said Florida House Speaker, Republican AllanBense, in announcement of the special session.

"As families are putting back together the pieces of theirlives, the Legislature will work hard to provide relief for some ofthe burdensome costs associated with their recovery," Mr. Bensepromised.

The hurricane deductible issue is not at the top of the agendafor the week-long session, however. Lawmakers will focus first onlegislation for pre-kindergarten programs.

While legislators are expected to establish a system toreimburse homeowners for claims relating to the hurricanes of 2004,the complexity of the issue and limited time will likely keep themfrom crafting a more permanent, forward looking system.

The most popular proposal, which is backed by Gov. Jeb Bush andChief Financial Officer Tom Gallagher, would reimburse thosehomeowners who were forced to pay multiple deductibles, roughly29,000 Floridians, using money from the state's catastrophefund.

That proposal seems to be acceptable to the industry, althoughsome questions have arisen as to whether the reimbursements shouldinstead come from the state's general revenue.

As a result of using the catastrophe fund, noted WilliamStander, regional manager for the Property Casualty InsurersAssociation of America, the fund will need to undergo a rapid cashbuildup by making assessments from companies that would pass thosecosts on to consumers via a CAT fund surcharge.

"If this is a statewide public policy to benefit someFloridians, maybe this should come from the general revenue," Mr.Stander said.

Lawmakers are also considering ways in which to prevent themultiple deductibles issue from resurfacing in the future, thoughthe complexities of doing so, in the establishment of a program andits administration mean that work will likely take place during thelegislature's general session in March.

"The devil is in the details," said Julie Pulliam, aspokesperson for the American Insurance Association's SoutheastRegional Office. Although she noted that, "a lot of work has beendone by the [state Senate Banking and insurance] committee staff,the governor's staff, and CFO Gallagher's staff," she said itseemed unlikely that any permanent program could be put in placeduring the special session, especially in light of the focus onpre-K programs.

"Insurance is not really at the top of the list," she said.

Mr. Stander said that it would probably be best for lawmakers towait before establishing a permanent solution to the multipledeductibles issue, noting that doing so would allow time for thedata collected on the issue to "mature" and become morefinalized.

Additionally, Mr. Stander noted that the session was technicallycalled to address "emergency" issues, which could apply to thosewho have already paid multiple deductibles, but does not apply,going forward.

"We're not going to have any hurricanes between now and March, Ihope." He said. "We're not opposing changes to the windstormdeductible, but we should le the data mature."