Consumer eViews
FLORIDA CHIEF FINANCIAL OFFICER TOM GALLAGHER'S WEEKLY NEWSLETTER

Volume 2, Number 1, January 3, 2005    

The cataclysm from the tsunami disaster in Southeast Asia is still unfolding. The number of deaths is climbing and, frightfully, now mirrors the population of the city of Tallahassee. The suffering is incomprehensible.

What does this mean to us in Florida? Recovering from the impact of four hurricanes in one season, we know the financial and emotional devastation and the toll it takes. We also know how important it is to give help in this time of need.

Many of us are donating to charity to help with direct relief aid. Make sure that the organization to which you give is reputable and recognized as a legitimate aid group. Be sure to ask questions – a legitimate group will be glad to answer your inquiries. 

Florida can also be proud that Governor Jeb Bush is calling on his Florida disaster relief experience as one of a distinguished group representing the United States overseas and now visiting the hardest hit areas. 

Our thoughts and prayers go out to all involved in this tragedy. Through the partnership of governments, non-governmental organizations and individuals around the world,  we hope victims of the tsunami take comfort in knowing that help is on the way. 

My best,

                      -- Tom Gallagher

GALLAGHER TO MORTGAGE HOLDERS: KNOW YOUR BANK’S PROCEDURE FOR PROCESSING INSURANCE CLAIM CHECKS

To assist Floridians who recently received claims settlement checks or who are expecting payments from insurance companies, Florida’s Chief Financial Officer Tom Gallagher is advising storm victims with mortgages to be aware of bank procedures for receiving insurance funds to make repairs. 

“If you have a mortgage, you will need to work closely with your lender to complete the repairs process.”  Gallagher said.  “Your bank may choose to release funds only as repairs are complete but should also remain focused on assisting you in restoring your home as quickly as possible.”

While policies may vary with individual financial institutions, insurance checks are usually made payable to both the homeowner and mortgage holder.  To receive funds, homeowners must forward claim checks to their lenders for endorsement.  For best security, a consumer should wait to endorse his or her check until after the lender has done so.  However, lenders may have additional procedures to follow.

The lender may require a contractor’s estimate of repair costs before any funds are released.  The lender may also retain insurance proceeds for disbursement as repairs are completed.  Your lender may be willing to release a portion of the proceeds if payments are required to begin repairs.  However, consumers are advised never to pay construction contractors, in cash or in full, before work begins. 

Gallagher first issued this advice in the aftermath of Hurricane Charley, but sought to reiterate the message after a recent increase in calls from consumers concerned about the repairs process and dealing with mortgage lenders.

For consumers who are cooperating with their lenders but continue to experience delays or difficulties completing the repairs process, Gallagher said insurance specialists are available to assist at
1-800-22-STORM.  

Consumers should also contact the Department of Financial Services if they are experiencing delays in dealing with adjusters or receiving claims settlement offers, or if they have a dispute with an insurance company over a settlement offer. 

START THE NEW YEAR RIGHT AND SAVE MORE

With the new year here, Florida’s Chief Financial Officer Tom Gallagher is urging Floridians to resolve to save more money.

“We all intend to save, but many of us just don’t follow through on our good intentions,” Gallagher said.  “I encourage Floridians to make 2005 the year that they resolve to thoroughly review their finances and find ways to save more money."

Gallagher offers the following tips:

Lower the cost of your outstanding liabilities. 
Review interest rates on all of your credit cards and loans.  Do research to see if you are paying a higher rate than the current average.  If you are, contact your creditors and negotiate a new rate.  If they won’t budge, consider moving your accounts.  This same rule applies to outstanding mortgage loans.  However, you must also consider fees connected with refinancing and calculate how long it will take to recoup the closing costs.  If you don’t know how to do the cost-benefit calculations, ask a loan officer to do the calculations for you. 

Make additional monthly payments. 
If you decide to keep your current credit card debts or mortgage loan, consider making affordable pre-payments.  Using a mortgage loan as an example, sending in $25 extra a month can save you thousands of dollars in interest and shave years off of the term of your loan.  Hypothetically, if you had a $100,000 loan at 8 percent and paid an additional  $25 per month, you would save more than $23,000 in interest and knock off over three years of mortgage payments.  Send in $50 per month and you save almost $40,000 and even more years off the term of the loan. With credit cards, the same mathematics apply.  The larger the payment over the minimum monthly requirement, the faster the debt gets paid and the less interest you will pay over the over the life of the debt.

Review your bank account to determine if it is the best product for you. 
Review your monthly bank statement to see exactly what fees you paid during the last billing cycle.  For example, are you charged for every check and ATM withdrawals?  You may find you can save money by simply changing from one type of account to another or by consolidating multiple accounts into one.

Pay bills on-line.  
Today, most major businesses and service providers, including utilities and phone companies, have websites for their customers.   With the cost of a postage stamp now at 37 cents, it may be worth your while to pay recurring debts over the net.  You’ll also save the costs of envelopes and avoid late fees because you will have complete control over when the payment gets made and applied to your account. 

Change your computer passwords. 
With identity theft now the number-one fraud in the country, you can’t be too careful when it comes to safeguarding computer passwords and personal information.  Most of us don’t change our passwords frequently enough.  Take the time to change all of your passwords.  Avoid using common passwords like birthdates, names or other familiar codes that can be easily broken.  Instead, use a mix of random numbers and letters.  Hackers will have a harder time deciphering your information if you do. 

Check Your Credit Report.
Make it a New Year’s resolution to check your credit reports on a frequent basis and address any discrepancies or errors.  Reviewing and managing your credit is important for two reasons.  First, if someone has stolen your identity you will know it because you will see inquiries and new debt on the report that you didn’t create.  Second, creditors use credit reports to rate your creditworthiness and establish an interest rate.  By correcting any errors, you may save money on loans and other types of credit.

The Department of Financial Services has launched a statewide campaign to promote financial literacy in Florida among all age groups.  For information on the campaign and more financial tips, log onto www.yourmoneyyourlife.org.

“Small measures can make a big difference in your financial matters,” Gallagher said.  “Don’t leave your finances to chance.”

SENIORS, YOUNG ADULTS ARE FOCUS OF NEW FIRE SAFETY PROGRAMS CREATED BY STATE FIRE MARSHAL’S OFFICE

Each year, fire claims the lives of Florida’s elderly more than any other age group.  At the same time, statistics show increasing fire incidents on college campuses.

To combat these sobering trends, State Fire Marshal Tom Gallagher has launched new education programs targeting the state's seniors and college students.

 “Fire prevention is one of the keys to independent living for Florida’s seniors, and for college students fire can pose a big risk as they take their first steps toward independent living” said Gallagher said. “The more information they have, the more our citizens can do to minimize their risk of being injured by fire.”

A new educational package is available to fire departments throughout the state, and includes training materials and a DVD loaded with tips and tools to help local firefighters and fire safety educators provide the elderly with information that can save lives.   The program was developed by DFS (including the Division of State Fire Marshal), the Department of Elder Affairs and the Florida Injury Prevention Program for Seniors (FLIPS).

The following statistics indicate the need for fire safety education among older adults:

  • Thirty-seven percent of residential fires begin in the kitchen because of a pot left cooking on the stove.
  • Electrical fires are most likely to occur in the bedroom where outlets and extension cords may be overloaded by space heaters, electric blankets and heating pads.
  • Elders age 75 and older are more likely to die from carbon monoxide poisoning than any other age group.

Also, this fall, fire prevention specialists with the State Fire Marshal’s Office visited university campuses to draw attention to the special risks college students face when living away from home for the first time.   The specialists were armed with a new video about fire safety and campus life, and another new program geared toward college students, “Candle with Care.”

Gallagher and the State Fire Marshal’s Office continue to place special emphasis on education for young children as well.  The Department’s “Safe House Mouse” program offers tips for kids and suggestions for parents and teachers to share practical advice on how to prevent and escape fire.  And, the Bureau of Fire Prevention has created a fire safety bookmark specifically targeting third-graders.

For more information about these programs, visit the State Fire Marshal’s Office's website  at www.MyFloridaCFO.com/sfm. 

TEENS: CASH IN ON YOUR MONEY SMARTS!

Having money smarts means knowing how to do things like stash your cash, watch your spending and shop for good deals.

It also means that teenagers know it is time to get going on submissions to our essay contest which is open to 14-18 year olds who want to win some money.  “Cash in on Your Money Smarts'' offers a top award of $750 for one student in each of five regions.

Friday, February 11, 2005, is the day that essays must be in to the Department of Financial Services to be eligible for up to $7,500 in cash prizes. The essay of at least 750 words, in English or Spanish, responds to the essay question “Why do you consider yourself money smart?”  Essays may be submitted electronically or by mail. 

"This is a chance for our teens to be rewarded for their knowledge of smart financial decisions,'' said Tom Gallagher, Florida's Chief Financial Officer.

The contest is part of a Gallagher initiative, Your Money, Your Life, to help Floridians avoid debt and build assets, including savings and home ownership. He started the program this summer after a state survey reported that many Floridians put themselves at financial risk by waiting too late to save.

The survey, performed by Mason-Dixon Polling & Research Inc., also found that interest runs high in providing Florida's youth with a solid education in personal finances. Nearly 90 percent of Floridians believe schools should teach financial management skills as a required part of the curriculum.

Three essays will be selected for each of five regions in Florida, and cash prizes will be awarded for first, second and third place. For complete contest details, or to download an essay application or submit an essay electronically, log on to www.MyFloridaCFO.com and click on "Cash in on Your Money Smarts.''  


Consumer Services HelpLine (800) 342-2762.