Fla. May Adopt Single-Deductible Option

The single-deductible scheme has the support of Florida's Chief Financial Officer Tom Gallagher, and it is also being considered by Florida Gov. Jeb Bush, who Mr. Lotane said is very concerned about homeowners who got tagged with multiple deductibles this hurricane season. "If Gov. Bush decides this is something he wants, I am sure the legislature will give him a vote on it," he said.

Mr. Lotane also commented that Gov. Bush and other state officials are looking at some type of compensation for homeowners who did have to pay multiple deductibles for this hurricane season.

"Perhaps it won't be dollar for dollar, but they are contemplating some compensation for people who were hit with multiple deductibles," Mr. Lotane said.

The Florida Office of Insurance Regulation explained that what many homeowners didn't understand this hurricane season was that a new deductible would apply each time their home was damaged by a hurricane.

Because the hurricanes this past August and September struck many of the same areas, numerous homeowners were left with multiple deductibles. The Florida Department of Financial Services, which also oversees the state's insurance regulation, has stated that it received more than 1,000 complaints about insurance companies charging multiple windstorm deductibles this year.

Mr. Lotane observed that what happened this hurricane season was "never anticipated."

"We never thought we would have three or four hurricanes hit the same place, and yet there were counties that got hit three times," Mr. Lotane said. "In central Florida, there are certain people who got hit three times. So, some people were liable for a triple deductible."

Mr. Lotane explained that what Mr. Gallagher supports is giving policyholders an option to choose a single deductible when purchasing homeowners coverage. But he also emphasized that it would also mean higher rates for those who chose such an option.

"If this proposal is adopted and if you allowed people to be limited to one deductible, that's going to change the math for insurers," Mr. Lotane said. "Insurers will say, ?Well, if we have to be liable for other deductibles, then we are going to need a little more rate to cover that.'"

Nonetheless, some homeowners may find peace of mind in having a single-deductible option, even at a slightly higher premium. "Some homeowners may think, ?I will pay a little bit more, but I don't want to get hit with multiple deductibles again in the future,'" Mr. Lotane said.