Insurance Reduction Set for Hearing Next Week

By: Michael Peltier, The News Service of Florida
By: Michael Peltier, The News Service of Florida

Tallahassee, FL - An ambitious property insurance rewrite with everything including the kitchen sink(hole) has been filed and will get its first public hearing next week as lawmakers try again to reduce costs for the industry.

From making it harder for public adjusters to re-open old claims to holdbacks of payouts pending proof of repairs, the bill (SB 408), sponsored by Sen. Garrett Richter, R-Naples, bears many similarities to legislation vetoed by Gov. Charlie Crist last year , who during his independent campaign for the U.S. Senate argued that part of it would raise rates in difficult economic times.

Richter, chairman of the Senate Banking and Insurance Committee, said the bill is a template for a final product that may not emerge until well into the session. The bill is expected to get its first hearing on Tuesday before Richter’s committee.

“I’m sure we’re going to see many changes between the bill that’s filed and the bill that we finally come up with,” Richter said earlier this month. “This bill is a starting point in that discussion.”

Among the provisions are:

-Allowing insurance companies to hold back a portion of claims payments until the policyholder shows proof that repairs and replacements are indeed taking place. Insurers have argued that Florida is one of the few states that requires insurers to pay claims up front and does not require proof that claims are not simply being pocketed.

-Reducing to three years the length of time a policyholder can re-file a claim, down from the five year window now on the books.

-Shifting the burden of proof in contested sinkhole cases from an insurance company burden to prove damage wasn’t caused by a sinkhole to a policyholder burden to prove it was. It also would require sinkhole work to be under contract before full payment is made.

- Placing restrictions on public adjuster advertising and capping commissions public adjusters can take on re-opened claims.

-Allowing an insurer to cancel a policy within 45 days if state regulators determine the cancellation serves the public or policyholder’s interest.

The industry tried to push through a similar broad ranging bill last year, and were disappointed by Crist’s veto. Crist left office earlier this month, and Gov. Rick Scott is thought to be more sympathetic to the industry. Scott hasn’t specifically commented on the new legislation.

One notable omission in the new proposal from last year’s bill is a provision to allow insurers to raise rates up to 10 percent annually to adjust for inflation and changing reinsurance costs without having to go through full blown hearings before the Office of Insurance Regulation, which annually calculates increases in those cost drivers.

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  • by Anonymous on Jan 21, 2011 at 11:24 AM
    By OIR rule, lending institutions cannot require you to carry a dollar amount of insurance on your home that is more than the replacement cost of your home. Worked for over 28 years in the place that regulates this. This is true. It is not an 'urban legend'.
  • by anon Location: Florida on Jan 21, 2011 at 08:17 AM
    Anonymous on Jan 20, 2011 at 09:54's folks like you that prompts us to take pictures and update the national Property Insurance Loss Registry. You will be denied when your ceilings cave in from the roof damage you didn't fix.
  • by Bob Location: Jasper on Jan 21, 2011 at 06:40 AM
    One thing that would help homeowners is to let us decide how much insurance we want. The companies value my home at three times the mortgage amount so I pay for coverage that I do not want. As long as the bank gets paid off I should be able to chose the amount of value and hence coverage, not the company.
  • by Surprise Location: leon county on Jan 21, 2011 at 05:17 AM
    Somebody needs to find out why rates go up hundreds of dollars a year with no claims, no storms and us folks living 50 miles or more from the Gulf high and dry paying the fright for those on the water? Those we've elected and those the've appointed to work for us in our name need to remember who they work for or get voted out take notice I'm not kidding. GRrrrrrr.
  • by anonymous on Jan 21, 2011 at 05:03 AM
    To:Posted by: Anonymous on Jan 20, 2011 at 09:54 PM It kinda makes sense if you ask me. If someone doesn't fix their home, their home becomes vulnerable for additional damage, which means more claims, and higher insurance premiums! Have you ever filed a claim with your health insurance (assuming you pay for health insurance and don't received Medicaid) and received a check because you didn't go to the doctor? What's the difference? You file a claim to fix problems, if your not going to fix the problem, then you should not be paid!
  • by Anonymous on Jan 20, 2011 at 06:54 PM
    if we are paying for the insurance why can't we do what we wish with the $$$ it is ours? burden of proof should stay with the insurance co in ref to a sink hole. How could you not see what a sink hole has damaged>>> just a way to set more $$$ and pay out less
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