The Florida Hurricane Catastrophe Fund needs $710 million to continue to pay claims still coming in from 2005’s Hurricane Wilma but it is going to have to wait to assess policyholders to get those funds.
The Florida Cabinet yesterday indicated it wants more of those claims investigated to make sure they are legitimate claims before authorizing the bond and raising assessments on all policyholders to pay for them.
The Cabinet postponed approval of the hurricane fund’s request to extend and increase to 1.3 percent current premium assessments on auto and home policyholders.
“Every legitimate claim should be paid, no question,” said Gov. Charlie Crist. But Crist said he did not want to see policyholders paying for what could be fraud.
“We don’t want to have good citizens have to pay for bad behavior,” said Crist.
Attorney General Bill McCollum and CFO Alex Sink joined Gov. Charlie Crist in calling for more research into what Crist called an “explosion of claims” before authorizing the funds for the FHCF.
Jack Nicholson, the chief operating officer of the catastrophe fund, said that “time is of the essence” because the fund has a declining cash balance and the hurricane season is coming. “We will try to work quickly as quickly as we can” to research the legitimacy of claims, he told the Cabinet.
Nicholson was asked to explain why so many claims are still coming in from 2005. Nicholson that the “very challenging economy” and “consumer friendly statutes” that can lead to abuse, especially on reopening old claims, could be behind some of the claims.
McCollum and Sink expressed support for legislation that would reduce the deadline for filing claims from an event from five years to three and rein in rogue public adjusters. Sen. Mike Bennett and Rep. Janet Long have filed legislation to reduce the claims filing window and boost regulation of marketing by public adjusters.
Sink said the five year deadline after Wilma is approaching and public adjusters know it so they are heavily marketing to get new claims and reopen old ones.
Sink also said insurers need more incentive to investigate claims rather than just passing them onto the hurricane fund, which has limited authority to investigate claims before reimbursing insurers.
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