Thursday, January 04, 2007

Florida Insurance issues


A Bill of Rights for Floridians from FIRM. For more information go to

We believe that windstorm insurance consumers in Florida are entitled to:

1. FAIR "USE AND FILE" PROVISIONS - Florida's current "use and file" statute is tantamount to "shoot first and ask questions later" - and the consumer is the shooting victim. Insurance companies should not be allowed to increase rates within a 12-month period by more than 10% without filing for and receiving approval first.

2. USE OF WINDFALL TAX REVENUES RESULTING FROM STORMS TO OFFSET RISING PREMIUMS - The increase in state tax revenues resulting from purchases consumers make to re-build their homes after a storm should be used to increase the Florida Cat Fund and offer new reinsurance options to help lower rates. The revenues are a direct result of the claims paid by insurance companies and the expenditures made by property owners who have suffered from storms, and these funds rightly should benefit them.

3. CLEAR, ITEMIZED PREMIUM BILLS - Consumers have a right to know everything that goes into their insurance bills, just as they do their tax bill. Every bill should include a full description of the property, a listing of all mitigation credits and details of every calculation (including base rate) used to arrive at the total due.

4. BASIC RATES SET TRANSPARENTLY IN ACCORDANCE WITH THE FLORIDA PUBLIC HURRICANE MODEL - Florida taxpayers invested $2.8 million in the Florida Public Hurricane Model. When the model was tested retroactively against actual damage from Hurricane Wilma, it proved far more accurate than private models. The Public Model should be used to establish windstorm rates unless the filing can publicly demonstrate that an alternative model is more appropriate.

5. "TAKE-OUT" STATUTES THAT DO NOT BANKRUPT CONSUMERS - Insurance companies should not be entitled to take customers out of the insurer of last resort and set rates that are uncompetitive and unaffordable. Consumers are left with premiums they cannot pay and with no option to move back to the insurer of last resort.

6. A CONSISTENT SOURCE OF PUBLIC MATCHING FUNDS TO HARDEN OUR HOMES - Use of public funds to fortify homes throughout the state against potential hurricane damage is not only a public service, but it will help limit the liability of insurance companies, thereby encouraging private companies to remain in or return to the Florida market. This should not be an ad hoc program, but a permanent part of the Florida budget.

7. COVERAGE AMOUNTS THAT ARE FAIRLY CALCULATED - If a major hurricane hits a coastal area, it is far more likely that the majority of damage will result from storm surge (flood) rather than wind. Property owners should not have to carry wind only coverage equaling 100% of the replacement cost when it is highly unlikely that wind alone would cause 100% of damage.

8. UNIFORM BUILDING CODES IN AREAS OF EQUIVALENT RISK - Areas in the state in equivalent wind-borne degree regions should be subject to the same strict building code. Structures in areas that have been "carved out" for less stringent codes should be subject to an insurance surcharge so that non-carve-out areas do not subsidize the risk these areas create.

9. ACCURATE ASSESSMENT OF BUILDING STRENGTH - It has been established that, though windstorms may strike less frequently in interior than coastal areas, interior counties suffer greater damage from storms of lesser strength because their building codes do not require the same fortification as on the coast. Many older homes in more hurricane-prone regions have been sturdily constructed and have proven to withstand strong storms. Further, some newer homes have been constructed to standards that exceed current building codes. Insurance premiums should reflect real building strengths without assigning arbitrary factors such as age or location.

10. DUE PROCESS ON INSURANCE ISSUES - Whether through the Consumer Advocate or the Office of Insurance Regulation, consumers should have an easily accessible, user-friendly system to inquire about their individual bills or challenge rates that are set by their insurance company, especially the state's insurer of last resort.

11. FLEXIBILE PAYMENT OPTIONS - Unlike auto or other types of insurance, consumers have no option to pay for their windstorm insurance by credit card or in installments. Rather, they are often faced with bills double or triple what they've paid in the past with no ability to meet that obligation over time, and sometimes forced to consider selling their homes. Insurers should offer alternatives for payments especially when premium increases severely disrupt family budgets.

12. TIMELY AND REASONABLE CLAIMS PROCESSING - Just as insurance companies demand prompt payment of premiums, consumers deserve timely payment of documented claims. Claims payments should accurately represent the real costs of repair and rebuilding in the policyholder's locale.

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