Canadian Underwriter

Florida votes to reimburse policyholders for multiple deductibles

December 19, 2004   by Canadian Underwriter

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The Florida legislature decided on Friday to support a plan reimbursing policyholders who paid multiple deductibles on claims filed as a result of this year’s four major hurricanes.
In the aftermath of Hurricanes Charley, Frances, Jeanne and Ivan, which struck the state between August and October, homeowners’ policyholders found themselves exposed to multiple deductibles for damage.
Prior to adjourning its special fall sitting, the Florida legislature decided to establish a program to be administered by the Department of Financial Services (DFS) to pay out the reimbursements.
The Property-Casualty Insurers Association of America (PCI) said it supported the decision, given that it does not require insurers to foot the bill for the paybacks.
It is estimated the multiple deductible issue applies to at least 29,000 policyholders in the state, although PCI expects this number to rise, as some consumers will file new claims to take part in the program.
The new law also does away with multiple deductible scenarios for multiple storms in one hurricane season in the future.
The legislature also decided to borrow $150 million from the Florida Hurricane Catastrophe Fund (FHCF) to provide financial assistance to consumers up to US$10,000 each, with the money to be subsidized by insurers over a five-year period beginning in 2006.

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