Volume 3 Number 6
February 6, 2006

Department of Financial Services button
Consumer Services HelpLine Number 800-342-2762
e-mail CFO Tom Gallagher
Press Releases button
Previous Issues button
CFO location button
Subscribe to Eviews button
Unsubscribe to eViews button
Text Version button


Mayor Julio Robaina and CFO Gallagher

Mayor Julio Robaina introduces CFO Gallagher, City Council Member Jose Caragol, and State Rep. David Rivera

On Saturday, I hosted a town hall meeting in Hialeah and had the opportunity to meet and talk with more than 300 homeowners on a variety of insurance issues, from delays in hurricane claims payments to problems with public adjusters.  Their frustration and feedback echoes what I have heard from Floridians all over the state, and is the reason I am pushing for federal and state solutions that will strengthen Florida’s homeowners insurance market and improve coverage options and protections for our citizens.  

My thanks go to Mayor Julio Robaina, who graciously invited me to host the meeting at City Hall, as well as to State Representative David Rivera and Senator Rudy Garcia for their commitment to helping their constituents through difficult times.  

With the help of our team of consumer specialists, we worked one-on-one with 114 policyholders to expedite the claims settlement process or to resolve outstanding issues and concerns on storm claims.  We had representatives from several insurance companies on hand to talk to their policyholders in person and mutually work towards resolving claims.

Another issue that emerged in my conversations with homeowners is that many did not realize that they may qualify for lower premiums because they have already taken steps to retrofit and strengthen their homes. I encourage all homeowners to call their agents to find out if they qualify for mitigation credits which translate into premium savings.   And as part of my comprehensive package of insurance reforms, I am recommending that state lawmakers allocate a portion of existing mitigation dollars from the Florida Hurricane Catastrophe Fund to retrofit older homes, especially those trapped in Citizens.

We are well on our way to recovering from two catastrophic hurricane seasons, and will be stronger because of it.  Now we must focus our attention on implementing federal and state policies that will ensure Floridians have more options for property coverage and can better prepare financially for a catastrophic storm.




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.             

“This legislation will ensure faster payment for storm victims following a major catastrophe,” said Chief Financial Officer Gallagher. “It will make it easier for families to get the money they deserve.”

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. 



Tom Gallagher, Florida’s chief financial officer, announced today that a new resource for fighting insurance fraud, coupled with legislative remedies he is pursuing, will strengthen efforts to combat auto insurance fraud, including tougher criminal penalties for “paper” and “phantom” automobile accidents, and revoking the licenses of drivers who commit auto insurance fraud. 

The new resource, Miami-Dade County Assistant State Attorney Erika Isidron, will be the second prosecutor in Florida dedicated to putting criminals who commit auto insurance fraud behind bars.  Isidron, a prosecutor for the last six years, most recently served as a chief of one of the felony trial divisions in the Miami-Dade State Attorney’s Office, overseeing prosecution of serious felony offenses such as sexual battery, armed robbery and homicide. 

“Increasing our investigative force and pursuing tougher laws will strengthen our ability to put scam artists behind bars and enforce our message that we intend to put the brakes on this costly crime,” said Gallagher, who oversees the state’s Division of Insurance Fraud (DIF).

Many auto insurance fraud cases involve unscrupulous lawyers, doctors and clinic owners who illegally bill for services covered by personal injury protection (PIP) coverage, which provides up to $10,000 for medical bills from an auto accident, regardless of who is at fault.  Florida law requires drivers to carry a minimum of $10,000 in PIP coverage and $10,000 in property damage liability coverage.




Request for Citizens' Rate Review



Independent review reveals Citizens is using questionable factors to raise rates

Tom Gallagher, Florida’s chief financial officer, said today that Citizens Property Insurance Corporation should not be allowed to arbitrarily raise rates without justifying them.

 “Citizens should be transparent and accountable for its financial and ethical performance, and that includes the rates that it charges,” Gallagher said.  “Nearly 800,000 Floridians are counting on Citizens for property protection and deserve options.  That is why I am calling for federal and state solutions that will strengthen our property insurance market and expand coverage options for Florida homeowners.”

According to Gallagher, the first flaw in Citizens’ rate filing is what is termed an administrative factor.  Citizens is asking for higher rates using the industry’s expense experience, which is significantly higher than the expenses that Citizens actually incurs.



Tom Gallagher, Florida’s chief financial officer, applauded a new rule that will require insurance companies to demonstrate how they use credit scores when writing or pricing insurance coverage and that the practice is not unfairly discriminatory. 

“There should be a zero tolerance policy for any information used by insurance companies that impacts your ability to obtain or maintain coverage based on your race, religion, income level, or other discriminatory factors,” Gallagher said. 

Gallagher led the charge on this issue starting in 2001, when he appointed a task force to examine the insurance industry’s use of credit reports and credit scores when writing and pricing homeowners and auto insurance coverage.  At that time, half of the top ten writers of homeowners insurance admitted to using credit information or credit scores, and nine of the top ten writers of auto insurance use one or both. 




Warrants issued for three others in connection with December motel fire

A woman suspected of operating a methamphetamine lab that sparked an explosion and fire in a Destin motel room in December was arrested in the parking lot of a Niceville motel.  Niceville Police Department officers reportedly seized a mini-meth lab and chemicals for processing meth from her gray Dodge truck.

Tom Gallagher, Florida’s state fire marshal, said detectives with the Bureau of Fire and Arson Investigations received warrants on Friday for Aprele Renee Lail, 35, and three others wanted in connection with the December fire at a Motel 6 in Destin.   Adrian L Hormuth, 28, Diana Knight Denmon, 48, and Steven Todd Bullard, 38, are also being sought on charges in connection with the December 6, 2005, fire at the 405 Harbor Blvd. motel. The early morning fire caused an estimated $100,000 in damages.

“That fire put numerous motel guests at risk of injury,” said Gallagher, who is pushing for legislation this year that would toughen criminal penalties for convicted meth manufacturers.  “In Florida, meth labs have been found in suburban and rural neighborhoods, state parks, hotels and motels, and in automobiles traveling on our highways.  This drug is tearing apart families and destroying lives and poses a significant threat to our communities.”