Consumer eViews

Volume 1, Number 23, June 7, 2004

As our nation mourns the loss of President Ronald Reagan, I’m reminded of his many great contributions to America’s history.  For me, Reagan’s greatest gift was returning to Americans a sense of pride in our country and the will to persevere in the face of adversity. Throughout his presidency he uplifted us as a nation to confront problems at home and abroad. 

During his administration, Americans witnessed the last gasps of communism in the former Soviet Union and in East Germany, as freedom began to prevail.  Our former cold war adversaries might not now be our friends and allies without the work of President Reagan.   

Reagan also offered comfort and eloquence in more tragic times, such as the Challenger shuttle disaster, which closely touched Floridians and fellow Americans around the country. President Bush followed Reagan’s example as he consoled Americans over the loss of the Columbia.

Reagan’s principles of using lower taxes to stimulate economic growth were revolutionary and led to tremendous economic recoveries during his administration.  These same principles, combined with strong fiscal discipline and a continued concern for protecting investors have been a model for state leaders here in Florida.  During recent economic downturns, other states have experienced extreme financial hardships and faced raising taxes to increase revenues, while Florida has lowered taxes and witnessed continued overall job growth and economic success.  

Reagan’s legacy lives on here in Florida, and in our nation.  As we grieve, let’s remember President Reagan as he would wish to be remembered – as a true American. 

My best,                                      

                                                                                                              -- Tom Gallagher


On August 24, 1992, while I was serving as Florida’s insurance commissioner, Hurricane Andrew hit south of Miami and became the costliest natural disaster in U.S. history.

The estimated total losses from Andrew reached nearly $30 billion, $16 billion of that amount in insured losses. If Andrew had shifted one degree to the North, slamming into downtown Miami, insured losses would have been more than $50 billion. 

In the years before Andrew, much residential and commercial development had popped up along our shorelines and in our cities and towns - on land once used for orange groves and cattle farms. Every home and every shop needed property insurance protection and each insurer was issuing new policies to keep pace with the demand. Before Andrew, Florida’s property insurance market was one of the most active and competitive in the nation. But in Andrew’s wake, companies that took in $11 billion in the previous 20 years paid out $16 billion in losses.

After Andrew, insurance companies wanted to drastically reduce the number of properties and amount of policy coverage issued in our state. Companies went bankrupt, wanted to leave the market, or simply would not write new policies in a state with high property values and the threat of hurricanes.  Approximately 936,000 policyholders were left with nowhere to turn for coverage. 

Following Andrew, decisive actions were taken to prevent an economic meltdown. We learned from Andrew and are now better prepared to meet the situation if it happens again.

In 2002, to help improve our homeowners insurance market I convinced the legislature to create Citizens Property Insurance Corporation from the merger of the state’s two residual markets for homeowners insurance. The benefits to Floridians have been meaningful. 

First – significant tax savings. Citizens was created with the guidance of state and federal expertise to be a tax-exempt organization.  Hundreds of millions of dollars that would otherwise have been paid in taxes will now be available to cover policyholder claims.  Citizens’ tax-exempt status also means billions of dollars in tax savings if bonds had to be issued to help pay claims after a catastrophic storm. 

Second – less government involved in this market. Florida previously had two separate residual property markets with separate administrations, two different headquarters and two sets of regulations and agendas.  Under Citizens, duplication of service is eliminated and dollars are being saved. 

Third -- improved customer service. Citizens issues an all-perils policy, including windstorm coverage, to its policyholders. The choice of a single policy means a policyholder has one insurance agent and one insurance adjuster for all perils and claims covered by the Citizens policy.

During the 2004 session, I successfully persuaded the legislature to improve the state's Hurricane Catastrophe Fund -- increasing the availability of homeowners insurance and improving Florida’s ability to recover financially from catastrophic hurricanes. With the passage of this legislation, several insurance carriers have already committed to writing more coverage this hurricane season.

What continues to concern me are the 800-900 new people who move here every day, leaving us vulnerable to greater catastrophic economic losses because of our larger population. Educating Florida’s citizens for hurricane preparation is an ongoing process.

We must ensure we are prepared financially, have a more efficient evacuation plan in place to get residents out quickly and safely, and establish better coordination among local, state and federal agencies in response to a disaster.

Ultimately, being prepared is the best defense against the storm.  


During the summer and fall months, Floridians will spend more time outdoors enjoying the state’s beautiful natural resources.  So it’s important to remember that Florida’s natural areas are as vulnerable as they are beautiful. 

Wildfires often begin unnoticed – a match thrown into the brush, a spark from a hot car engine, a lightning strike, a neglected campfire. Fires can spread quickly, igniting brush, trees, and homes. Weather, topography and fuel are the three components that affect the likelihood of a fire starting. Clearing out the fuels – living vegetation and dead plant material -- can help reduce the wildfire threat.

Be aware of the potential hazard around you before wildfire strikes. Plan what to do and where to go if wildfires threaten your area, because during a wildfire time is crucial and resources are limited. Knowing what to do will provide you and your family safety, security and peace of mind.


  • People start most wildfires – learn to practice and promote wildfire safety.
  • Report hazardous conditions that could cause a wildfire.
  • Contact your local fire department or forestry office for information on fire laws.
  • Teach children about fire safety. Keep matches out of their reach.
  • Post fire emergency telephone numbers
  • Mark driveway entrances with your name and address. Make sure that fire vehicles can get to your home.
  • Plan several escape routes away from your home by car and by foot. Choose a safe meeting place for all family members outside of the house.
  • Talk to your neighbors about wildfire safety. Plan how the neighborhood could work together during and after a wildfire.


  • Landscape your home with wildfire safety in mind. Keep brush clear from around the home and plant fire-resistant shrubs and trees to reduce the amount of flammable vegetation in the yard.
  • Use fire-resistant or non-combustible materials on the roof and exterior structure of the dwelling. Or, treat wood or combustible material with UL-approved fire-retardant chemicals.
  • Keep leaves, dead limbs and twigs raked and cleared including dead branches over the roof.
  • Ask your power company to clear branches from power lines.
  • Mow grass regularly and remove vines from the walls of the home.
  • Follow local burning regulations.
  • Clear a 10-foot area around any propane tank or barbecue grill.
  • Dispose of stove, fireplace, and grill ashes properly.
  • Store gasoline, oily rags, and other flammable materials in approved safety cans away from buildings.
  • Stack firewood away from your home. Use only UL-approved wood-burning devices.


  • Listen to your battery-operated radio for reports and evacuation information. Follow the instructions of local officials.
  • Park your car in an open space facing the direction of escape with the key in the ignition.
  • Make plans to care for your pets in case you must evacuate.
  • Arrange temporary housing at the home of a friend or relative away from the threatened area.
  • Choose a route away from fire hazards. Watch for changes in the speed and direction of fire and smoke.



Wildfire and other types of disasters -- hurricane, flood, tornado or hazardous materials spill -- can strike quickly and without warning. You can cope with disaster by preparing in advance and working together.


Create a disaster plan and meet regularly with your family to practice your home escape plan.

Have working smoke alarms installed on every level of your home, test them monthly and keep them clean and equipped with fresh batteries at all times. Know when and how to call for help. Visit the Florida State Fire Marshal’s website for more information at  


Investigators are asking for additional victims to come forward

Following charges last July of grand theft and scheme to defraud, a former Orlando insurance agent has been arrested a second time for allegedly misappropriating workers’ compensation premiums paid by area businesses. The new charges also stem from the previous investigation.

“Workers’ compensation fraud is a major contributor in the rise of premium costs to small businesses,” said Chief Financial Officer Tom Gallagher, who oversees the Department of Financial Services. “We will continue to aggressively investigate instances of fraud and abuse of the workers’ compensation system.”

Investigators with the department’s Division of Insurance Fraud say Beverly Jean Phillips, 62, of 2818 Geoffrey Dr., failed to forward nearly $40,000 in workers’ compensation premiums paid to her by 13 local businesses. Phillips allegedly issued false certificates of coverage to the employers, potentially leaving employees without protection in the event of an on-the-job injury. Phillips was charged with 13 counts of grand theft and one count of scheme to defraud. She was arrested this week and booked into the Orange County jail.

The department is searching for additional victims who may have been defrauded by Phillips. Individuals with information related to this case should call the department’s toll-free insurance fraud hotline at 1-800-378-0445 or the Orlando Field Office at 407-835-  4400.

The charges follow Phillip’s arrest last July on similar charges. In September, she pleaded guilty to grand theft and was sentenced to three years of probation and community service. The department subsequently revoked her insurance license.

The Department of Financial Services, Division of Insurance Fraud, investigates fraud in all types of insurance, including health, life, auto, property and workers’ compensation. Anyone with information about this case or other possible insurance fraud activity should 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.



Florida Department of Financial Services assisted FBI in investigation

 A former Pensacola resident and owner of a medical consulting business has been convicted of mail and wire fraud for her role in an insurance fraud scheme. Lawanda Nall, 39, was convicted on 10 separate counts and awaits sentencing in August.

Investigators with the FBI and the department’s Division of Insurance Fraud were alerted by State Farm Insurance Company to a suspicious claim for business and personal losses and business interruption due to a burglary of Caom Enterprises, owned by Nall and located at 7410 N. Palafox St. Nall filed claims via U.S. Mail totaling more than $370,000.

During the investigation, it was revealed that Nall staged the break-in and stored the missing items in a rental storage unit in Alabama under a relative’s name.

The Escambia County Sheriff’s Office also assisted in the investigation.

The Department of Financial Services, Division of Insurance Fraud, investigates various forms of fraud in insurance, including health, life, auto, property and workers’ compensation insurance. Anyone with information about this case or another possible fraud scheme should call the department’s Fraud Hotline at 1-800-378-0445.  A reward of up to $25,000 may be offered for information leading to an arrest and conviction.

Florida Department of Financial Services'
Consumer Services HelpLine