Gallagher Addresses Hurricane Victims’ Concerns of Multiple Deductibles

Floridians hit by four hurricanes in six weeks faced the likelihood of paying individual deductibles for each hurricane, amounting to tens of thous-ands of dollars in deductibles, until Florida’s Chief Financial Officer Tom Gallagher became involved.

Just as the fourth hurricane of the season, Jeanne, turned around and headed back to Florida, Gallagher released a statement indicating he was “deeply troubled” that multiple deductibles could increase the financial burden for many homeowners and businesses attempting to rebuild.

“Currently, state regulators’ hands are tied because a Florida law passed in 1996 permits insurance companies to charge a 2 to 5 percent deductible, depending on the value of a policyholders’ home,” Gallagher said. “We need to look for options from
the Florida Legislature that will help relieve this financial burden and speed up the process of rebuilding.

“I believe it is fundamentally unfair for consumers to pay multiple deductibles during the hurricane season. I also believe that consumers deserve to have a choice in the amount of deductible they will pay, whether it is $500, two percent or higher. State law should not prevent consumers from choosing a ded-uctible that best fits their financial circumstances.

“Governor Bush is already considering the need for a special session to address these issues and potentially others. I echo his concerns and join with the governor in pursuing solutions that will balance both the availability of insurance coverage with the need for affordability for Florida citizens.”

The multiple deductible became obvious to Orlando-area homeowners who suffered a double blow when hurricanes Charley and Frances struck in quick succession. Florida insurance regulators received almost 1,000 complaints from homeowners who learned that they had to ante up two deductibles.

“The law does allow it,” Gallagher said. “Each named hurricane is a separate event, but I don’t think it’s fair.”

Gallagher would like to see the law changed so policyholders would only be charged one deductible during a hurricane season.