GALLAGHER CALLS FOR LEGISLATION TO SPEED UP THE REBUILDING PROCESS FOR STORM VICTIMS
Tom Gallagher, Florida’s chief financial officer, called for new legislation to help expedite the rebuilding process for hurricane victims. The measure would ensure homeowners immediately receive insurance money for additional living expenses and lost personal contents, as well as 20 percent of the insurance proceeds to repair structural damage, without the need for an endorsement from their financial institution.
Gallagher said he is recommending the measure as part of a comprehensive package of reforms he has put forward to strengthen Florida’s homeowners insurance market and improve coverage options and protections for homeowners.
During town hall meetings held throughout the state, CFO Gallagher heard from too many consumers who had to wait weeks for their payments for temporary housing or to secure a contractor to start storm repairs. The Department of Financial Services, which Gallagher oversees, heard from more than 350,000 consumers following the 2004 and 2005 hurricane seasons and a majority complained about the delays in receiving insurance payments.
Gallagher said insurance companies should issue checks for living expenses and personal contents only to the homeowner because the financial institution does not have a vested interest. He said that a portion of the money to repair property should also go directly to the homeowner so they could make an initial payment to a contractor, rather than having to resort to high-interest credit cards and loans to start repairs. Land values, which are not insured, in addition to private mortgage insurance and equity would ensure that the lender’s interest in a property is adequately covered. The remaining insurance proceeds would still be subject to present dual endorsement requirements by lenders.
Gallagher said the rules now in place present hurricane victims with even more challenges, because the mortgage they obtained in Florida often has been sold to a new company based in another state. Gallagher believes storm victims should not have to jump through additional hoops to get money that is rightly theirs.
This latest legislative proposal offered by Gallagher is another component of his comprehensive insurance reform package to be considered by the Legislature.
Gallagher’s reform package includes calling on Congress to establish a national catastrophe fund and to create Catastrophic Savings Accounts to help Floridians save money tax-free to cover hurricane deductibles or expenses. On the state level, Gallagher is lobbying state lawmakers to earmark surplus sales tax revenue collected in the wake of hurricanes to offset hurricane assessments against homeowners. He is also pushing for standardizing Florida’s building code statewide and capping coverage of homes in excess of $1 million by Citizens Property Insurance Corp., the state’s insurer of last resort.