Double Or Triple Hurricane Deductibles Are Not Fair, Your Elected Officials Agree
By: Thomas M. Kallman
As most of you know from following the extensive media coverage on how hundreds of thousands of Florida insurance consumers have suffered from “windstorm deductible” clauses, I offer the following update as of mid Decembers legislative sessions.
It appears the Florida House and Senate have agreed on what to do with the double windstorm deductible issue facing the State of Florida policyholders since this past storm seasons shocking end. Lawmakers are expected to appropriate up to $150 million from the Florida Hurricane Catastrophe Fund to reimburse residential policyholders with damage from two or more hurricanes that suffered more than one deductible. Here are a few of the tentative points as of mid December as I write this article, which are subject to change prior to being voted into law.
For residential policies issued effective May 1 2005 or after, windstorm deductibles will apply on an annual basis to all hurricanes occurring during the same calendar year. Insurers may apply the “other perils” deductible such as fire or other types of property losses other than windstorm, or the remaining amount of the hurricane deductible; whichever is greater, to subsequent hurricane losses.
Policyholders must report claims below their deductible and maintain records or receipts in order to apply the loss to a subsequent storm. If a policyholder has a hurricane loss and then changes the hurricane deductible, the highest deductible will apply. Again, these requirements apply to policies issued or renewed on or after May 1 2005.
Under these two bills things are pretty well set, as outlined below:
• A policyholder must have damage in excess of the full amount of one deductible (which may be met by adding two or more claims below the deductible).
• There is a maximum reimbursement of $10,000 per policy, or $20,000 per policy if damaged by three or more hurricanes.
• There is a maximum reimbursement for a condominium association policy up to $3,000 per unit.
• A $100 deductible will be applied to any reimbursement.
• Applications for reimbursement must be filed with the Department Of Insurance by March 1, 2005, including such information as the Department requires including documentation from the insurer. At this point it is unknown when reimbursement forms will be ready and how to request one.
• Insurers must mail notice of the reimbursement procedures to all appropriate policyholders.
• If funding is inadequate to pay everyone in full, the Department must first pay policyholders who received claims payments for two or more hurricanes for which each payment was reduced by the full amount of the deductible; then, pay other eligible policyholders on a pro rata basis until the $150 million is exhausted from the Catastrophe Fund.
