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

Volume 3, Number 24, June 12, 2006

Here we go again. Not even two weeks have passed since the official beginning of hurricane season, and our state is already experiencing the first tropical system of 2006. As Tropical Storm Alberto moves ahead toward a landfall in North Florida, I once again am joining with Governor Bush to urge all Floridians to prepare in advance for these storms. A “culture of preparedness” is vital if our state is to overcome the devastating effects of tropical weather.

We have all seen how failure to plan in advance can lead to devastating consequences. Due to our vast experience with 8 hurricanes over the past two years, Florida has become a national leader in disaster preparation. Our residents know first hand the importance of having a plan in place and executing that plan should the need arise.

In that vein, the Department of Financial Services is in the process of implementing the newly created Florida Comprehensive Hurricane Damage Mitigation Program. This $250 million program is the first of its kind in the nation, and will allow homeowners to have their homes upgraded using matching funds from the state.

This exciting new program will help thousands of homes to better withstand the damage that hurricanes can inflict. But more important than any program is individual responsibility and responsiveness. Now is the time to make sure you and your family are properly prepared.

-- Tom Gallagher


FLORIDIANS MUST PREPARE FOR TS ALBERTO

Floridians will begin feeling storm’s impact today

Tom Gallagher, Florida’s chief financial officer and state fire marshal, is urging residents and visitors throughout Florida to stay alert to news regarding the path of Tropical Storm Alberto and quickly complete preparations for strong winds expected later today with landfall projected tomorrow afternoon near the Taylor-Dixie County Line.

“Our experience over the past two years has highlighted the urgency of being prepared,” Gallagher said. “Take steps now to prepare and to protect your family and home.”

Gallagher said the winds could extend as much as 230 miles from the center, impacting residents along the coast as far south as Manatee County and as far west as Mexico Beach. Maximum winds are currently forecast at about 75 mph.

In the event of heavy storm damage, Gallagher will oversee the fire and rescue operations at the state’s Emergency Operations Center and will deploy staff to assist with rescue and recovery.

The Department of Financial Services’ storm hotline is activated, 1-800-22STORM, to assist residents in preparing for a storm as well as dealing with damage after a storm. The department’s website at www.MyFloridaCFO.com also contains a wealth of information to assist consumers in getting ready for a storm and dealing with the potential aftermath. The website includes a Hurricane Toolkit, an Insurance Checklist, and answers to common insurance questions.

Gallagher also commended the Governor and Legislature for approving a Hurricane Preparation Tax Free Holiday at the end of June that is estimated to have saved Floridians as much $41 million in sales taxes on items they needed to get ready for the 2006 hurricane season. Hurricane season continues until November 30.

Gallagher recommends property owners take these actions before a storm:

  • Monitor news for storm information and evacuation orders.
    Buy the materials you need to secure your property and minimize your losses. Cover your windows with shutters, siding or plywood. Move vehicles into a garage or carport when possible. Grills and/or patio furniture should be moved inside.

  • Inventory your household items, including receipts, purchase dates and serial numbers. Photograph or videotape your possessions. Keep copies of this information and your insurance policies in a safe place and keep the originals in a safe deposit box.

  • Write down the name, address and claims-reporting telephone number of your insurance company, which may differ from your agent’s contact information. Keep this information in a safe place and make sure you have access to it if you are forced to evacuate your home.

  • Be sure you know what your deductible is for hurricane losses.

In the event of damage, Gallagher recommends that you:

  • Keep materials such as plywood and plastic on hand in case you need to make temporary repairs after a storm. Keep receipts for those repairs so that your insurance company can reimburse you.

  • Never use a generator indoors or in any enclosed area including a garage, carport or sunroom.

  • Avoid using candles and do not use a candle or lantern near a generator or stored fuel.

  • Make emergency repairs to protect from further damage, document the damage and repairs in writing, and with receipts and photos.

  • Immediately report property damage to your insurance agent and company. \

  • Maintain copies of your household inventory and other documentation, including photos. This will assist the adjuster in assessing the value of the destroyed property.

  • Take precautions if the damage requires you to leave your home. Let your agent or insurance company know your temporary forwarding address and phone number.

  • Beware of fly-by-night repair businesses. Hire licensed and reputable service people.

  • If considering the assistance of a public insurance adjuster, verify that they are licensed by calling the department’s storm hotline at 1-800-22-STORM.

  • Be sure you understand how much a public insurance adjuster is charging and what services are included before signing any contract.

For more hurricane preparation tips, visit the Department of Financial Services’ web site at www.MyFloridaCFO.com, and click on Hurricane Season 2006.

“Preparedness is the best defense,” Gallagher said.


FREE HOME INSPECTION AND MATCHING GRANT PROGRAM

My Safe Florida Home, our new program to help Florida homeowners strengthen their homes to withstand hurricanes, is taking shape with a new website, www.mysafefloridahome.com.

During the 2006 Legislative Session, the Florida Legislature approved and the governor signed a new law that directs the Florida Department of Financial Services to administer the program to reduce hurricane damage exposure in our state.

My Safe Florida Home will offer free home inspections and matching grants up to $5,000 for specific home improvements to qualified homeowners.

This program will offer an unprecedented opportunity to help thousands of Floridians better protect themselves and their families against hurricanes. The program will be a massive undertaking but is a priority for our agency to have up and running as quickly as possible.  As required by the new law, our department must take certain preparatory steps before the program can be implemented and before homeowners can apply for inspections and grants.

If you are an interested homeowner, please take a few minutes to read through the Question & Answer section of the website, http://www.mysafefloridahome.com. Please fill out the form in the Contact Us section of the website to receive more information as it becomes available.

If you are a home inspector or mitigation provider interested in participating in this program, please fill out the form in the Contact Us section of the website.

 


WORKERS' COMPENSATION FRAUD UNCOVERED

Chief Financial Officer Tom Gallagher announced  the arrest of Courtney Pleasant, who was booked into the Lake County Jail on felony charges of grand theft and submitting a fraudulent workers’ compensation certificate.  

Pleasant, 27, owns and operates Legendary Insurance & Financial Services in Leesburg.  Pleasant acting as a State of Florida licensed insurance agent, only licensed to sell life and health insurance products, represented and promised to provide workers' compensation insurance products he was not licensed or authorized to provide.   He provided payroll services for his client and invoiced and collected fees for workers' compensation coverage that was non-existent.  Pleasant additionally provided a false insurance document to give the illusion that there was valid coverage.

Pleasant was initially arrested on April 14, 2006, for a scheme to defraud and 16 others counts of theft, forgery, and fraud. The subsequent publicity in the Lake County community caused other clients of Legendary Insurance & Financial Services to question the legitimacy of the services provided by Pleasant and contact the Division of Insurance Fraud to investigate.      

Pleasant was arrested on 2 felony counts and booked into the Lake County Jail on $4,000 bond.  

The Department of Financial Services, Division of Insurance Fraud, investigates fraud in all types of insurance, including health, life, auto, property and workers’ compensation.  To report information about this case or any other possible insurance fraud case, call the department’s fraud hotline at 1-800-378-0445.  A reward of up to $25,000 is offered for information leading to a conviction.


RENTERS INSURANCE IS ESSENTIAL FOR FINANCIAL SECURITY

Most Americans -- approximately three quarters -- insure their homes and personal possessions against fire, theft and other damages, according to a recent National Association of Insurance Commissioners (NAIC) consumer survey. However, there's one notable exception: young singles. Only 34 percent of Americans who own a home or rent an apartment at this life stage have homeowners or renters insurance.

Homeowners insurance covers a home's physical structure and the owner's personal property. In contrast, renters insurance only protects personal property. Everyone -- homeowners and renters -- benefits from liability coverage, which provides financial protection in case others are injured while visiting their homes.

Understanding options with regard to homeowners/renters insurance is the first step in making sure you get the right type and amount of coverage to fit your individual needs.

Many consumers are not aware that they have the option to insure their home and belongings for either the replacement cost or the actual cash value. Actual cash value is the amount it would take to repair a home or replace damaged possessions after factoring in depreciation. Replacement cost is the amount it would take to repair a home with materials of similar kind and quality, or to purchase new possessions without deducting for depreciation. Understandably, insuring property to cover replacement costs is more expensive than insuring it for its actual cash value, but may be worth the difference if a consumer can afford the higher premiums.

To facilitate in filing a claim, make an inventory of personal belongings and save receipts for major items, along with a photograph or video of each room. This documentation should be stored in a safe place outside the home, such as a safe deposit box, in case the dwelling is destroyed.

As many consumers learned from last year's violent hurricane season, damage to a home or belongings caused by flooding is NOT typically included in a homeowners policy. Consumers who live in areas prone to flooding should inquire about flood insurance through the federal government's National Flood Insurance Program (NFIP).

People who own expensive valuables like jewelry, antiques or art may want to purchase an endorsement to their homeowners policy, as these types of valuables are typically not covered by basic policies.

Many factors that affect insurance costs are within the control of consumers. Shop around and compare the costs of comparable coverage from different insurers to get the best value.

Install smoke detectors in key locations; keep fire extinguishers handy, especially in the kitchen.  Install dead-bolt locks and a burglar alarm system, particularly one that directly contacts the police or fire department or an external monitoring service.

If you can absorb the higher out-of-pocket expenses in the event of a loss, select a policy with a higher deductible (the amount not reimbursed by your insurance) as the higher the deductible, the lower the premium.

Consolidate homeowners and auto policies with the same insurer to qualify for a multi-policy discount.

Young singles, who typically rent rather than own and may have one or more unrelated roommates, should know that each leaseholder needs his/her own individual renters policy to protect his/her own possessions and against liability for accidents that happen on their premises.

Young families who may be buying their first home should know that in most instances it only makes sense to insure their home itself and belongings-not the land on which the home sits. Also if they install a swing set or trampoline for their kids, they should consider additional umbrella liability insurance to cover them in the event a visiting child is injured while on their property.

Established families that may be remodeling or building an addition to their home should update their homeowner's policy to reflect these enhancements, particularly if they add $5,000 or more to the value of their home.

Seniors should ask if they are eligible for discounts.

When a mortgage is paid off and the homeowners insurance was previously paid through the mortgage company, owners need to alert the insurance company to send the premium bills directly to the owner and to pay the bill on time so that the homeowner's policy doesn't lapse.

All consumers need to protect themselves from being scammed by fake insurance companies selling bogus insurance policies. Consumers need to take a few minutes to stop, call the consumer helpline and confirm that a company is legitimate and authorized to sell insurance in Florida before purchasing insurance.

For more useful information about insurance, consumers can visit the NAIC's new consumer education web site, Insure U Online, at http://www.insureuonline.org/. The Florida Department of Financial Services' Verify Before You Buy website offers information on a variety of financial topics to help consumers with these important decisions. http://www.MyFloridaCFO.com/verifybeforeyoubuy/


Consumer Services HelpLine (800) 342-2762