Gov. Bush Pledges to Sign SB1486; Insurers Uneasy About Its Provisions

Florida Gov. Jeb Bush pledged during the May 11 opening of the annual Governor’s Hurricane Conference at the Tampa Convention Center to sign and approve Senate Bill 1486, controversial legislation that consumer advocates say doesn’t go far enough, and insurance industry observers say goes “too far.”

The Florida Legislature debated SB 1486 until the early morning in Florida — and that is not good for consumers or insurers, according to one critic of the bill.

Among the key changes:

Policyholders are promised they can still seek policy limits if they prove wind would have destroyed their homes even without flood. Insurers are guaranteed that when consumers do that, they don’t collect more than it costs to rebuild.

It also means the insurance industry will see changes to the Florida Hurricane Catastrophe Fund, from which companies buy coverage to help them pay claims after a hurricane.

Companies will now be able to draw from the fund for smaller storms that resulted in $1 billion or more in losses, provided the two worst storms of the season caused at least $4.5 billion apiece in damage.

Allstate Floridian lobbyist George Grawe said the bills failed to address the major problem facing the industry–the lack of capital to pay hurricane claims.

Grawe tried to convince lawmakers to change the Florida Hurricane Catastro-phe Fund to make it easier for companies to tap in the event of a series of major storms.

SB 1486 would provide consumers with a checklist to make it easier for them to know what is covered in their household policies and changes state law determiningwhat insurers have to pay if a home is destroyed. It allows insurance companies to pay only for the damage they cover, meaning a wind insurer wouldn’t pay for flood damage.

Provisions also make it easier for insurance companies to tap into the Florida Hurricane Catastrophe Fund to help pay claims, something the industry wanted since last year’s four storms.

The Senate bill ends arbitration as an alternative for insurers when state regulators reject homeowner rate increases, establishes standard rating territories and requires companies to pay claims within 30 days.