Florida Legislature To Take Up Deductible Issue

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 to reimburse homeowners who must pay multiple deductibles on their insurance claims for multiple hurricane damage.[@@]

"The members of the Florida House and Senate have identified several issues that must be addressed before March, particularly financial needs resulting from the four major hurricanes that hit Florida this summer," said Florida House Speaker, Republican Allan Bense, in announcement of the special session.

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

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

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

The most popular proposal, which is backed by Gov. Jeb Bush and Chief Financial Officer Tom Gallagher, would reimburse those homeowners who were forced to pay multiple deductibles, roughly 29,000 Floridians, using money from the state's catastrophe fund.

That proposal seems to be acceptable to the industry, although some questions have arisen as to whether the reimbursements should instead come from the state's general revenue.

As a result of using the catastrophe fund, noted William Stander, regional manager for the Property Casualty Insurers Association of America, the fund will need to undergo a rapid cash buildup by making assessments from companies that would pass those costs on to consumers via a CAT fund surcharge.

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

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

"The devil is in the details," said Julie Pulliam, a spokesperson for the American Insurance Association's Southeast Regional Office. Although she noted that, "a lot of work has been done by the [state Senate Banking and insurance] committee staff, the governor's staff, and CFO Gallagher's staff," she said it seemed unlikely that any permanent program could be put in place during the special session, especially in light of the focus on pre-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 to wait before establishing a permanent solution to the multiple deductibles issue, noting that doing so would allow time for the data collected on the issue to "mature" and become more finalized.

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

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