A catastrophe modeling firm said the slow progress fixing a hugebacklog of hurricane damaged homes in Florida is boosting labor andmaterial costs and will raise the cost of repairing future stormdamage.

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Researchers at Risk Management Solutions (RMS), Newark, Calif.said the elevated price of labor and materials that resulted fromlast year's hurricanes is expected to persist through this year'shurricane season that begins today.

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Their analysis of the insurance claims data from the 2004 stormsshows that as of last month, repair costs in the southeast U.S.remained 20 to 40 percent above the national average.

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With a considerable amount of repairs still underway in Florida,the efforts have been slowed due to a shortage of materials andcontractors. Worldwide construction projects such as the rebuildingeffort in Iraq and construction of the Three Gorges Dam in Chinahave resulted in higher prices for plywood, steel, and cement, RMSsaid.

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The firm noted that in Florida it takes outside contractors onaverage a period of four months to be registered to operate in thestate. This obstacle in the opinion of Phil LeGrone, claimsresearch director for RMS, has been a factor in the rate ofrepairs.

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Mr. LeGrone said, based on clients' opinions expressed at thePCS Catastrophe Conference in New Orleans last May, residentialrepairs in Florida will not be completed until first quarter of2007.

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Meanwhile, in response to the requests of Florida homeowners formore transparent insurance policies, Governor Bush signed ahomeowner's insurance law into effect today with provisions to beimplemented as the year progresses.

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The new law prohibits non-renewal of homeowner's policies whohave sustained hurricane damage until 90 days following thecompletion of repairs.

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Agents must now fill out a mandatory policy checklist providingdetails of what is and is not covered by the policy

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Insurance companies must notify the policyholder of thepotential cost associated with a hurricane deductible. In additionany rate hike exceeding 15 percent is subject to a publichearing.

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