The legislation would allow insurance companies to raise rates up to 10 percent a year, reduce discounts for storm proofing homes… and require policyholders to prove they’re using insurance payouts on repairs.
“If you got 20-thousand dollars, they would probably give you 10, then come out and inspect it, and if the work is being done, fund the next piece and if the work is being done, go ahead and pay the final,” said State Senator Mike Bennett.
Industry experts say the legislation is needed because Florida’s insurance rates are too low, and a major storm could bankrupt some of the state’s biggest companies.
“Without storms in the last four or five years, we have probably had six or seven companies go out of business in Florida that are in the home owners business,” said Tim Meenan, an insurance regulatory lawyer.
Consumer advocates say the legislation would make it harder for people to repair their homes after a disaster… and discourage upgrades.
“It seems that we have been telling consumer that they need to fortify their homes, strengthen them, and less the risk for the insurance companies. Now the insurance companies are saying they are still hurting. It doesn’t make sense,” said Brad Ashwell with Florida PIRG.
The insurance reform bill passed its first committee stop Wednesday.
But even if both chambers pass the legislation, they’ll still have to get it past Governor Charlie Crist.
Crist vetoed similar legislation last year
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