Fla. Lawmakers Urged: Stick to Key Issues

When the Florida Legislature meets in special sessions in December lawmakers should focus on the most pressing matters facing more than 1.2 million commercial and residential property owners and leave less urgent concerns until March regular sessions, according to Kevin McCarthy, Florida Commissioner of Insurance Regulation.

McCarthy told the Florida House Insurance Committee that four urgent topics need to be tackled right away. He advised the committee to quickly eliminate multiple hurricane insurance deductibles for property owners affected by more than one storm; protect homeowners facing multiple deductibles; prevent the loss of insurance coverage while awaiting repairs; and to provide tax breaks for homeowners whose properties have been destroyed.

Lawmakers were cautioned not to make sweeping changes in a short period of time that they might regret later. It was pointed out that post-Hurricane Andrew insurance regulations took several years to configure and are still being revised. Reforms made after Andrew allow insurance companies to assess deductible payments for each storm, a cost-saving provision lawmakers and industry officials agree did not contemplate the consequences if a homeowner was hit with multiple hurricanes in the same year.

McCarthy suggested topics like adjusting the state’s catastrophic hurricane insurance pool, setting aside more money to weather a more serious storm, and providing regulatory relief for insurance companies to minimize potential premium hikes, should all wait until March when lawmakers return for the 2005 legislative session.

Approximately 30,000 Florida residents may be liable for multiple deductibles worth more than $54 million. Legislators will have to figure out how to design a reimbursement plan that doesn’t have unintended consequences.

Floridians hit with unrealistic property tax assessments for severely damaged or destroyed homes need tax relief without depleting funding to counties and cities that use property tax revenue.
Expected losses from the four hurricanes are now at $20.6 billion but likely will increase as claims continue to be settled. Hurricanes Frances and Jeanne alone generated nearly 900,000 claims with an estimated loss of $8.7 billion.

Despite the need to tune the system, state officials say the reforms made after Hurricane Andrew have proven effective. In contrast to the mass exodus of insurance companies following Andrew’s devastation, only Plantation-based American Superior Insurance Co. has gone under because of hurricane losses, leaving about 58,000 residents forced to seek insurance elsewhere.

“The Legislature’s actions after Andrew have allowed us to be the financial position we’re in right now,” McCarty said.

Topics Florida Catastrophe Legislation Hurricane