Florida Legislature’s Approval of $150M Relief Looks Like ‘A Done Deal’

The Florida Legislature is expected to decide today or tomorrow to provide $150 million to help hurricane victims strapped with large insurance deductible payments. The House and Senate both support the plan, so according to insurance industry observers in Tallahassee, “it looks like a done deal.”

The Senate Banking and Insurance Committee has signed off on the proposal to take $150 million from the Florida Hurricane Catastrophe Fund (Cats) and help hurricane victims who paid more than one storm deductible this season.

The bill passed unanimously through the committee, despite questions from senators who wondered whether money should be taken out of Cats, because insurers could make up for the shortfall by charging policyholders.

Senate Democratic leader Lesley Miller of Tampa told The Fort Lauderdale Sun-Sentinel that the people deserve this, “My concern is just where the dollars are coming from, and what happens if it comes from there.”

Should legislators decide to take assistance money out of the Cats fund, it would result in an average increase in cost of 0.5 percent each year for five years, according to a Senate staff analysis of the bill. Insurers buy reinsurance coverage from the Cats fund to help cover claims after a hurricane, and include that cost in insurance premiums.

The legislators’ other option is to take money from the state’s general revenue fund. A similar proposed financial aid package making its way through committees in the House of Representatives calls for taking $100 million from the state’s general revenue fund. Both plans allow storm victims who paid more than one hurricane deductible to apply to the state’s Department of Financial Services for up to $10,000 in assistance.

Alhough Gov. Jeb Bush had initially backed taking money from the catastrophe fund, on Tuesday he said he’ll support either method of paying storm victims socked with multiple deductibles. The state’s Office of Insurance Regulation estimates more than 29,000 Floridians paid at least two full storm deductibles after the four hurricanes.

Where the money comes from shouldn’t hold up the assistance package, and will be negotiated during this week’s special session, said Sen. Rudy Garcia, R-Miami, the bill’s Senate sponsor and chairman of the Senate Banking and Insurance Committee.

However legislators decide to pay for it, those who paid multiple deductibles say the state’s help is desperately needed.

The other facet of multiple-deductible legislation — eliminating double deductibles in favor of a seasonal deductible — also drew questions during Tuesday’s Senate committee meeting. Some said they wished they had more time, rather than during the weeklong special session, to measure the impacts of shifting to a seasonal deductible.

For instance, insurance industry officials have said eliminating the multiple deductibles could raise insurance rates by as much as 3 percent.

But it doesn’t make sense to give people money for multiple deductibles and continue to allow them in the future, so the two have to be treated as a package deal, Garcia said.

“If we’re going to fix the past, how can we leave future policies untouched?” he said. “That means that we could have this problem occur all over again. So it would seem unlikely to me that we would not deal with this prospectively as well.”

Some lawmakers also discussed trying to help mobile home residents, who generally don’t pay property taxes, but many of whom suffered serious financial problems in the wake of the storms. One proposal would offer a sales tax break to people buying replacement mobile homes.

Topics Florida Catastrophe Legislation Hurricane