Multiple Florida Deductibles Under Fire

Multiple Florida Deductibles Under Fire

By Steve Tuckey

NU Online News Service, Sept. 27, 4:14 p.m. EDT?Hurricane Jeanne represents the first time since record-keeping began in 1851 that Florida has been struck by four hurricanes in one Atlantic storm season.[@@]

With that in mind, policymakers will face pressures to provide some relief to beleaguered property owners facing multiple deductibles from storm damage in a period of less than two months.

As a result, one component of the system put in place to assure availability of homeowners insurance after Hurricane Andrew in 1992 may face revision.

Standard & Poor's analyst Thomas Upton noted that as part of the companies' risk management protection against high frequency of events was the maintenance of relatively high deductibles.

"In effect, the risk was managed by putting in back on the policyholder," Mr. Upton said. "As realization of this sets in, regulators will be pressed to find ways to provide relief to consumers in the future."

John Laurance Reid, an aide to Florida State Senator Steve Geller, who represents the Fort Lauderdale area, said plans are underway to call a session of the lawmakers, who will be elected on Nov. 2 for sometime in December.

The main issue on the table will be the multiple deductibles from those property owners on the southeast coast hit by Frances and Jeanne and the Orlando area hit by Charley on August 13 and Frances on Sept. 3.

Any tinkering with the formulation of relatively high deductibles would only apply to future hurricanes.

Roger Morris, a spokesperson for the Property Casualty Insurers Association of America, stressed that any change in the deductible formula will have to result in a change to the rate structure.

He said that early estimates from the Florida Dept. of Insurance indicates there have been about 250 complaints from policyholders facing double and sometimes triple deductibles.

A spokesman for the Florida department was not available for comment

Mr. Reid held out the possibility that the U.S. Federal Emergency Management Agency could provide the relief to the property owners now.

"After all, the governor could call the president, who is his brother and this is an election year and say ?you take care of it this year and we will fix the problem in the future."