Fla. OKs 2 Percent Insurance Surcharge Due to 2004-05 Storms

November 1, 2007

Floridians with homeowner, commercial and liability insurance polices will pay a third 2 percent surcharge to help cover claims against four insurers that went belly up after a series of hurricanes in 2004 and 2005.

Insurance Commissioner Kevin McCarty agreed on Monday to the surcharge, which also applies to medical malpractice and aircraft policies. It also had been approved Oct. 11 by the board of the Florida Insurance Guaranty Association.

The surcharge – the third in the last 15 months – for the first time will apply to customers of the state-created Citizens Property Insurance Corp. Citizens lost its exemption from such assessments as part of insurance legislation passed in January.

The one-time assessment is expected to begin appearing on customers’ bills in March as policies renew.

It is expected to raise $315 million to help pay claims for the failure of the Tampa-based Poe Financial Group’s three insurers – Atlantic Preferred, Florida Preferred and Southern Family Insurance – and a fourth small company, Vanguard, said association executive director Sandra Robinson. Some of the money also will be held in reserve.

Most of the assessment – $250 million – will be for claims against the three Poe companies. That’s besides $500 million from the last two assessments bringing the total for Poe claims to $750 million.

The surcharges are along with premium increases – double and triple in some cases – that many Florida policyholders have received after the run of hurricanes. January’s legislation has resulted in some small reductions.

Although it has been two years since the last major storm, Hurricane Wilma, new and supplemental claims are still coming in from former Poe customers at the rate of 50 to 100 a week, Robinson said. She attributed that to public adjusters aggressively soliciting South Florida homeowners.

Hurricane Law Center attorney Paul Berger said many Poe policyholders had been underpaid but were unaware they could amend their claims until approached by the adjusters.

Information from: The Palm Beach Post, http://www.pbpost.com

Topics Claims Florida Hurricane Windstorm

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