|Date:||June 15, 2016|
Fort Lauderdale, FL. June 15, 2016: The Florida Association for Insurance Reform (FAIR) recommends several potential solutions to mitigate recent rate hikes that have stemmed from increases in the severity and frequency of water claims. Paul Handerhan, FAIR’s Senior Vice President of Public Policy, was speaking at the “Troubled Waters” forum in Boca Raton, organized by Sha’Ron James, Florida’s Insurance Consumer Advocate. Handerhan stated that the rising number of water claims are associated with the increased proliferation of Assignment of Benefits (AOB) contracts. He said that this situation was so critical that it warrants immediate action by policymakers, and that a special session by the Florida legislature may be needed if administrators did not have the necessary authority to cure the problem.
Mitigation efforts provide measurable reductions in loss of life and damage to insured property. FAIR advocates for policy reforms that provide funding to implement long-term mitigation projects that improve the safety, financial stability and independence of all Floridians. Handerhan offered the following policy prescriptions as a win-win-win situation for consumers, the insurance industry, and local government:
1) Encourage lawmakers to statutorily lower the Florida Hurricane Catastrophe Fund’s (FHCF) rapid cash buildup factor, a process that was implemented by the State Legislature more than five years ago to quickly build up reserves. FAIR believes this initiative has successfully achieved its stated goals and recommends reducing the rapid cash buildup factor and then earmarking the balance for the Florida Department of Emergency Management (FDEM), to be used for wind and water mitigation projects. The FDEM could use these funds to implement a more robust mitigation program across the entire state for those individuals and communities that need it most.
2) Encourage Florida insurers to invest heavily in their communication structures to better control the claims handling process and improve policyholder satisfaction.
3) Educate policymakers and work towards an immediate solution to the AOB challenge and the resultant water claims crisis, preferably through administrative reform.
FAIR believes that this three-pronged approach, in which investing in mitigation is given high priority, will go a long way in creating an environment that promotes stability within Florida’s insurance marketplace.
About FAIR Florida Association for Insurance Reform (FAIR)
FAIR is a non-partisan, non-profit educational organization that works to educate Florida consumers and insurance industry stake-holders about the effects of insurance public policy. Unlike other organizations that represent specific constituencies, FAIR works with constituencies to facilitate ongoing dialogue and transparent communications. FAIR believe that there is a solution to every insurance problem that both promotes a robust insurance market and also protects consumers and policy holders. www.floridainsurancereform.org