Insurance Proposals Stalled in Fla. Legislature
Two plans, one to reimburse homeowners hit by multiple hurricanes, and the second to charge only one deductible per hurricane season, stalled in debate yesterday during special sessions of the Florida Legislature as concerns were voiced about how much money to allocate and where to obtain those funds.
Gov. Jeb Bush proposed giving reimbursements of up to $10,000 each to approximately 30,000 homeowners hit by multiple hurricanes. The governor also suggested the system could be fixed by creating a single deductible per hurricane season so that homeowners wouldn’t face the problem again.
The cleanup efforts are necessary due to the aftereffects of Florida’s 1996 insurance law, which kept hurricane insurance costs low by allowing companies to charge deductibles of 2 to 5 percent of a home’s value on policies worth $100,000 or more.
Summarizing Monday’s activities, Senate President Tom Lee gave the plans only a 50-50 chance of passing. Lee, R-Brandon, warned that some lawmakers were balking at “subsidizing” private contracts between a homeowner and an insurance company.
A spokesman for Florida Intercoastal Underwriters, one of the state’s largest insurers of waterfront condominiums, told the House Insurance Committee that limiting insurers to charging a single per insurance season could cost condominium policyholders as much as 37 percent more in annual insurance premiums. The firm writes $30 billion in policies to condominium associations across the state.
House members were sympathetic. But that didn’t stop disagreements on significant changes in insurance policy.
The House has proposed spending $100-million in state tax revenues, capping compensation to each homeowner at $20,000 for up to three hurricanes.
The Senate and governor want to tap $150-million in reserves in the state’s reinsurance catastrophe fund with a mandate that insurance premiums be increased to pay the money back over the next five years. They also want to provide up to $30,000 in reimbursement for homeowners whose property was damaged by all four hurricanes.
“The fact is, to fix what seems like a little problem is far greater,” said Senate Banking and Insurance Committee Chairman Rudy Garcia, R-Hialeah said. “You change the deductible and you affect everything else that insurance is based on. To be responsible you have to look at all the details.”
Late Monday, House Insurance Committee Chairman Dennis Ross, R-Lakeland, added another variable.
After hearing testimony that a seasonal deductible could cost homeowners as much as 3 percent more in insurance premiums, Ross said he’d try to amend the House plan by offering another caveat: Requiring insurance companies to offer a seasonal deductible in the future, but not requiring consumers to buy it.
Even Gov. Bush appeared resigned that the proposal might have to wait until March and the annual regular session.
“There is some question whether that is going to happen or not,” Bush said. “We hope there is a prospective change.”