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

Volume 3, Number 13, March 27, 2006

Last Thursday, the Florida House of Representatives voted to repeal the state intangibles tax – a tax that unfairly punishes our citizens for saving and investing, and has been a burden shouldered almost entirely by seniors, small-business owners and middle-aged savers.

As a young legislator more than 30 years ago, I was a vocal advocate of eliminating this unjust tax.   It is appalling that more than 220,000 individuals, couples and businesses in Florida today have been double-taxed, paying taxes on the money they earn as well as on the money they save. 

Moreover, it is impossible to estimate the number of people or businesses who chose to relocate to a state other than Florida to avoid having their savings taxed. Eliminating the intangibles tax will encourage a new influx of investors, entrepreneurs and retirees, which in turn will result in more investment and more growth in our economy.

I applaud state lawmakers for taking steps to abolish this unreasonable tax.


-- Tom Gallagher


STATEMENT FROM TOM GALLAGHER ON NEWS OF DEFICIT IN CITIZENS PROPERTY INSURANCE CORPORATION

The House Insurance Committee received news that the anticipated deficit for Citizens Property Insurance Corporation, the state’s insurer of last resort, is estimated to be $1.7 billion. Tom Gallagher, Florida’s chief financial officer, released the following statement on the deficit, which by law must be paid through assessments on all Florida homeowners’ insurance policies:

“This news only reinforces the need for immediate rate-relief for Florida’s property owners, which can be accomplished by using surplus sales-tax revenue to offset insurance assessments.

“In the wake of eight hurricanes in 15 months, too many Floridians are already dealing with sharply higher insurance premiums. Refunding hard-earned tax dollars to Florida’s families in the form of insurance rate-relief makes sense and is sound fiscal policy.

“State lawmakers have shown incredible leadership in helping Floridians recover quickly from these storms. Another way to help reduce the burden of storm losses is by refunding surplus sales-tax revenue, and I will continue to urge policymakers to support this measure.

“We need to also reduce the size of Citizens and its financial impact on Florida property owners, including getting out of the business of covering high-end properties and vacation homes.”


HOME MITIGATION FOR SAFETY AND SAVINGS

When it comes to hurricanes and tropical storms, Floridians know it pays to be prepared. To help, we have posted information on the FLDFS website designed to help you lessen the impact of a major storm or hurricane.  Whenever a tropical storm or hurricane takes aim at our state, Florida's Chief Financial Officer Tom Gallagher activates a special consumer helpline for assistance on any insurance matter. The number is 1-800-22-STORM, or 1-800-227-8676. Hearing-impaired residents may use a TDD to call 1-800-640-0886.

Hurricanes can cause severe damage.  Before hurricane season, you should take steps to protect your property and provide for your own safety.  The Department of Financial Services' Natural Disaster guide can help you prepare for disasters. In Florida, you may be entitled to discounts on your insurance premiums if you take measures to strengthen your home against potential hurricane damage.

Why invest in hurricane-resistant building techniques?

Wind insurance incentives are available to Florida homeowners for building features that mitigate or reduce damage during high wind events like hurricanes. Methods that reduce wind damage include improved roof shingles, strong roof decks, hurricane clips/straps, impact resistant glazing or shutter protection for windows, roof shape and other construction techniques. These features can be added to an existing structure or incorporated by building code in a new structure.

Florida Statute 626.0629 requires insurance companies to offer Florida homeowners "discounts, credits, or other rate differentials..." for construction techniques that reduce damage and loss in windstorms.

Many existing houses may already have construction features that qualify for insurance discounts. Houses built after 1994 in Miami-Dade or Broward counties and after 2002 building code changes in the rest of the state have wind-resistive construction features and will likely qualify for credits. 

Floridians can reap the benefits of investing in building techniques that strengthen their homes against hurricane damage in four ways:

1) Homes built to withstand catastrophic storms are safe havens, allowing homeowners to avoid costly evacuations from hurricane-prone areas.

2) Discounts on insurance premiums are available for certain mitigation measures, reducing insurance cost to homeowners.

3) Homes built with to these standards are at a lower risk of sustaining extensive damage, making more attractive risks for the private market to insure.

4) Overall loss of homes and business can be reduced in the event of a catastrophic storm, helping our state avoid a negative economic impact.

You can build to save – your family and your money – by investing in hurricane-resistant building techniques. To find out about your potential mitigation discounts, go to the page linked below. Use the drop-down menu to find your insurance company for an explanation of your company's discounts for different types of mitigation, and how you can qualify.

Click here to go to the mitigation discount page.

You will also find useful information on handling claims and obtaining help. Then contact your insurance agent to inquire about discounts on your property insurance. And take the necessary steps to improve your property for safety and savings.

If you have a problem with a claim, you can file a request for assistance online with the Florida Department of Financial Services and, you can look up licensing information on insurance agents and adjusters.


PREPARE FOR HURRICANE SEASON NOW BY PURCHASING FLOOD INSURANCE

It is important that property owners and renters living and doing business in Florida purchase flood insurance before the next hurricane season. Flood damage is not covered by homeowners insurance, commercial insurance or tenants insurance and flood insurance is a major part of preparation for hurricane season.

The storms of 2004 and 2005 taught Florida residents that property is vulnerable wherever it is located in the state, not just on the coast. While the risk is higher if the property is in an area designated as a flood zone by the National Flood Insurance Program (NFIP), national flood insurance is available for property in all zones - low, moderate and high risk. The cost of the insurance is less in low- to moderate-risk areas.

Inland flooding can occur almost immediately – and even a small amount of flooding can cause significant risk and damage. As tropical storms move inland, rainfall dumped in short timeframes can result in flash flooding that can last up to a week or more. Just six inches of moving water can sweep a person off his or her feet, and only a few inches of water can cause thousands of dollars of damage to homes and businesses.

Flood insurance is easy to obtain and is sold by most insurance agents. There is a standard 30-day waiting period before the insurance is in effect, so act now to protect your property. 

  • Homeowners can purchase up to $250,000 of coverage, plus an additional $100,000 to cover their home's contents.
  • Business owners can purchase up to $500,000 of coverage, plus an additional $500,000 for the building's contents.
  • There is no payback requirement for flood insurance settlements.
  • The average flood insurance premium is around $450 per year.
  • Flood insurance policies must be renewed every year.

Visit www.FloodSmart.gov or call 1-800-427-2419 to learn how to prepare for floods, how to purchase a national flood insurance policy and about the benefits of protecting homes and property against flooding. The toll-free number and Web site provide flood insurance resources and information, including tools to find an agent and estimate the cost of insurance premiums.


IRS ESTABLISHES EMAIL BOX FOR TAXPAYERS TO REPORT PHONY EMAILS                           

The Internal Revenue Service announced today that it has established an electronic mailbox for taxpayers to send information about suspicious e-mails they receive which claim to come from the IRS. Taxpayers should send the information to: phishing@irs.gov.

The IRS’s new mail box allows taxpayers to send copies of possibly fraudulent e-mails involving misuse of the IRS name and logo to the IRS for investigation. Instructions on how to properly submit one of these communications to the IRS may be found on the IRS Web site at www.irs.gov. Enter the term phishing in the search box in the upper right hand corner. Then open the article titled “How to Protect Yourself from Suspicious E-Mails” and scroll through it until you find the instructions. Following these instructions helps ensure that the bogus e-mails relayed by taxpayers retain critical elements found in the original e-mail. The IRS can use the information, URLs and links in the bogus e-mails to trace the hosting Web sites and alert authorities to help shut down these fraudulent sites.

However, due to the volume the new mailbox is expected to receive, the IRS will not be able to acknowledge receipt or reply to taxpayers who submit their bogus e-mails. The phishing@irs.gov mailbox is only for suspicious e-mails and not for general taxpayer contact or inquiries.

The IRS reminded taxpayers to be on the lookout for scam e-mails aimed at tricking the recipients into disclosing personal and financial information that could be used to steal the recipients’ identity and financial assets.

“The IRS does not send out unsolicited e-mails asking for personal information,” said IRS Commissioner Mark W. Everson. “Don’t be taken in by these criminals.”

The IRS has seen a recent increase in these scams, many of which originate outside the United States. To date, investigations by the Treasury Inspector General for Tax Administration have identified sites hosting more than two dozen IRS-related phishing scams. These scam Web sites have been located in at least 20 different countries, including Argentina, Aruba, Australia, Austria, Canada, Chile, China, England, Germany, Indonesia, Italy, Japan, Korea, Malaysia, Mexico, Poland, Singapore and Slovakia, as well as the United States.

The current scams claim to come from the IRS, tell recipients that they are due a federal tax refund, and direct them to a Web site that appears to be a genuine IRS site. The bogus sites contain forms or interactive Web pages similar to IRS forms or Web pages but which have been modified to request detailed personal and financial information from the e-mail recipients. In addition, e-mail addresses ending with “.edu” — involving users in the education community — currently seem to be heavily targeted.  

The IRS does not send out unsolicited e-mails or ask for detailed personal information. Additionally, the IRS never asks people for the PIN numbers, passwords or similar secret access information for their credit card, bank or other financial accounts.

Tricking consumers into disclosing their personal and financial information, such as secret access data or credit card or bank account numbers, is identity theft. Such schemes perpetrated through the Internet are called “phishing” for information.

The information fraudulently obtained is then used to steal the taxpayer’s identity and financial assets. Typically, identity thieves use someone’s personal data to empty the victim’s financial accounts, run up charges on the victim’s existing credit cards, apply for new loans, credit cards, services or benefits in the victim’s name and even file fraudulent tax returns.

When the IRS learns of new schemes involving use of the IRS name or logo, it issues consumer alerts warning taxpayers about the schemes.

For more information on phishing (suspicious e-mails) and identity theft, visit the IRS Web site at www.irs.gov.

For information on preventing or handling the aftermath of identity theft, visit the Federal Trade Commission’s Web sites at www.consumer.gov/idtheft and www.OnGuardOnline.gov (and click on Topics).

For schemes other than phishing, please report the fraudulent misuse of the IRS name, logo, forms or other IRS property by calling the Treasury Inspector General for Tax Administration’s toll-free hotline at 1-800-366-4484.  



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