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

Volume 1, Number 34, August 23, 2004          

“If you are going through hell,” Sir Winston Churchill once said, “keep going. 

While meeting last week with people whose homes and lives were devastated by Hurricane Charley, I had that thought running through my mind.  Hurricane Charley mapped a destructive course from Sanibel Island through Fort Myers, Punta Gorda, Arcadia, Lakeland, Orlando and Daytona Beach.  The destruction is extreme, and so are the emotions and hardships that residents and business owners are facing in the aftermath.

But the only way through it is, just that, through it.  And a lot of organizations and individuals have responded with assistance.  First there were those who were on the scene even before the hurricane hit, prepared with ice, water, food and various necessities.  The Federal Emergency Management Agency also was on stand-by, as were the state’s Emergency Operations Center response teams.   

The day after the storm hit, I mobilized the Department of Financial Services’ Mobile Response Unit, and dispatched nearly 100 insurance specialists and investigators.  The State Fire Marshal’s Office, as the lead EOC agency for search and rescue,  coordinated 300 firefighters and emergency personnel and provided equipment to help clear roads to facilitate searches.

While victims of Hurricane Charley may feel alone, they are not.  I and all of the employees of the Department of Financial Services will continue to work to help each of you get back on your feet.  We will continue to work on the ground and through our toll-free storm line at 1-800-22-STORM (227-8676). 

Our thoughts and prayers are with you.

 

                                      -- Tom Gallagher


GALLAGHER URGES BANKS, CREDIT UNIONS TO BE FLEXIBLE WITH LOANS AND CREDIT FOR CUSTOMERS AFFECTED BY CHARLEY

At a meeting with Florida’s banking industry, Chief Financial Officer Tom Gallagher asked industry officials to offer a compassionate response to Floridians dealing with the devastating aftermath of Hurricane Charley.

“I’m asking financial institutions to reach out and help the thousands of storm victims by increasing credit limits, eliminating fees for services and granting loan payment extensions,” Gallagher said. “When disaster strikes, we must all stand together to help those in need, and I’m proud to partner with Florida’s banking industry in getting our citizens on the road to recovery.”

Gallagher addressed members of the Florida Bankers Association (FBA) in Naples and asked banks and credit unions to consider increasing credit card limits and credit lines, reducing or eliminating late fees on loans, granting temporary loan payment extensions, allowing customers to delay loan or credit card payments, expediting loan applications, and waiving ATM and check-cashing fees for storm victims, even if they are not accountholders. In response, industry representatives pledged to implement the proposals to assist those coping with the storm.

“Florida’s banks stand ready to help the victims of Hurricane Charley,” said FBA President Mike Fields, who also serves as president of Bank of America, Tallahassee Region. “The banking industry supports CFO Gallagher in calling for more assistance for Floridians in need and pledges to continue our many efforts to rebuild Florida’s affected communities.”

Gallagher also urged storm victims to take these precautions:

  • Deposit your insurance proceeds check. Don’t cash it.

  • Pay contractors by check, not cash, and keep receipts.

  • Don’t pay until the work is completed.

  • If you finance repair work, understand the interest rate, terms and conditions.

  • If you need financial assistance, call your financial institution.

Following the meeting, Gallagher toured hurricane-damaged areas in Polk County with local lawmakers, promising continued assistance for Floridians with insurance questions or problems. Gallagher pledged to keep the Department of Financial Services’ hurricane hotline open for consumers at 1-800-22-STORM (1-800-227-8676).


GALLAGHER, INSURANCE EXECUTIVES TOUR STORM-DAMAGED AREAS

Florida’s Chief Financial Officer Tom Gallagher took executives from several major insurance companies on aerial and ground tours of areas devastated by Hurricane Charley. Gallagher organized the visit so that executives charged with quickly paying claims in the storm’s aftermath could gain a personal understanding of the hardships faced by thousands of Floridians.

“For the victims of Hurricane Charley, there is real human tragedy,” Gallagher said. “That’s why I asked insurance executives to travel to Florida to see firsthand and meet personally with those affected by the storm, to ensure a prompt and compassionate response from insurance companies.”

Because of today’s meeting, companies represented committed immediately to step up efforts to provide Additional Living Expenses (ALE) payments, mobilize more adjusters and promptly pay insurance claims. The department has received more than 6,700 calls, most regarding adjusters who have yet to arrive, and has opened nearly 400 complaint files.

In response to Hurricane Charley, Gallagher has also issued several emergency rules for public adjusters and proposed a 60-day grace period for insurance premium payments and non-renewals of homeowners insurance policies.

The emergency rules ban public adjusters from requiring cash up front to adjust claims for victims of Hurricane Charley and limit public adjuster fees to 10 percent of the claim amount. The rules also give consumers up to 14 days to back out of a contract without penalty.

“By limiting fees, it’s our hope that homeowners and business owners dealing with the aftermath of the storm know what to expect and aren’t scammed and gouged financially by public adjusters inflating their fees,” Gallagher said. Gallagher also said that while he was imposing a 10 percent cap on adjuster fees, policyholders are free to bargain with adjusters to get their services at lower rates.

Gallagher said he will ask Governor Jeb Bush and other members of the Florida Cabinet, which also serves as the state’s Financial Services Commission, to co-authorize the 60-day insurance premium grace period and moratorium on non-renewals at the next Cabinet meeting on Tuesday.

“We have residents who don’t have a roof over their heads, or even a way to receive mail and may not for weeks,” Gallagher said. “As we work to come to grips with the aftermath of Hurricane Charley, we will need to recognize extenuating circumstances for storm victims. We need to focus on helping our citizens and businesses get back on their feet.”

Gallagher will ask to extend these measures through October 15 to storm victims in Brevard, Charlotte, DeSoto, Hardee, Lake, Lee, Orange, Osceola, Polk, Sarasota, Seminole, and Volusia counties, which have been declared as substantially affected counties.

Gallagher also is asking banks and credit unions to consider increasing credit card limits and credit lines, reducing or eliminating late fees on loans, granting temporary loan payment extensions, allowing customers to skip a loan or credit card payment, expediting loan applications, and waiving ATM and check-cashing fees for storm victims, even if they are not accountholders.

The Department of Financial Services, which Gallagher oversees, has teams of investigators on the ground investigating reports of any unlicensed adjusters, inappropriate adjuster offers or contractors working without workers’ compensation insurance.

Department investigators arrested the owner of a tree service on Wednesday when they learned he was paying his workers in cash and did not have workers’ compensation insurance, as required by Florida law. Mark Steven Link, 43, owner of Link Built Tree Experts of Royal Palm Beach, was arrested at the scene of a dispute with one of his customers in Port Charlotte. Contractors working without coverage can pose a financial risk to property owners.

To verify that an adjuster or agent is licensed, to get help filing an insurance claim or verify a contractor has coverage, call the department’s storm hotline at 1-800-22-STORM (227-8676).

To assist consumers, Gallagher has deployed the department’s Mobile Response Unit to the Publix parking lot at 24123 Peachland Blvd. in Port Charlotte. Specialists are also located at FEMA outposts including the Herald Recreation Center, 23400 Herald Ave. in Port Charlotte; the Germain Arena, 11 Everblades Parkway in Estero; and, at DeSoto Middle School, 420 East Gibson St. in Arcadia.

The executives participating included: Bob Ricker, Executive Director of Citizens; Joe Formusa, President of State Farm Florida; Phil Lawson, President Allstate Floridian and Bob Pike, General Counsel of Allstate Floridian; Doug Robinett, CEO of Nationwide Ins. and Mike Kaylor, President of Nationwide of Florida; Lee Ann Ned, Senior Corp. Officer for Property and Casualty of USAA; Dan Eldridge, President of Mobile USA; Nancy Baily, President of First Floridian; Paul Condrin, Vice-President for Claims of Liberty Mutual; Jim Wurdeman, President of Atlantic Preferred; Brian MacLean, Sr.Vice-President for Claims of St. Paul Travelers; John Auer, President American Strategic; Bobby Bowden, Vice-President for Property and Casualty; Bruce Howson, President of Qualsure; Mark Welzenbach, Vice-President for Claims of Hartford Ins. of the Midwest; Billy Sanders, President of Vanguard; Don Matz, Vice-President for Reinsurance of Tower Hill Preferred Ins. Select; Loni Lugo, Chief Marketing Officer of Cypress; and Mark Davey, President of Fidelity National.

 


CFO GALLAGHER WILL ASK CABINET TO PROVIDE 60-DAY GRACE PERIOD FOR PREMIUM PAYMENTS, NONRENEWALS

Gallagher also urges banks, credit unions to be flexible with loans and credit

Florida’s Chief Financial Officer Tom Gallagher will ask Governor Jeb Bush and other members of the Florida Cabinet for authorization to give the hardest-hit victims of Hurricane Charley a 60-day grace period for premium payments and non-renewals.

Gallagher will ask to extend these measures through October 15 to storm victims in Brevard, Charlotte, DeSoto, Hardee, Lake, Lee, Orange, Osceola, Polk, Sarasota, Seminole, and Volusia counties, which have been declared as substantially effected counties.

Gallagher already is asking banks and credit unions to consider increasing credit card limits and credit lines, reducing or eliminating late fees on loans, granting temporary loan payment extensions, allowing customers to skip a loan or credit card payment, expediting loan applications, and waiving ATM and check-cashing fees for storm victims, even if they are not accountholders.

“We have residents who don’t have a roof over their heads, or even a way to receive mail and may not for weeks,” Gallagher said.  “As we work to come to grips with the aftermath of Hurricane Charley, we will need to recognize extenuating circumstances for storm victims.  We need to focus on helping our citizens and businesses get back on their feet.

 The department has also learned that some scammers may be sending emails under the guise of a financial institution asking for information to ensure the security of an account, when they actually are looking for information to steal your identity.   Gallagher said consumers should not respond to such emails, and instead should call their financial institution directly to inquire about their accounts.

Kevin McCarty, Commissioner of Insurance Regulation, said that insurers could easily comply with the measures Gallagher will ask for at Tuesday’s Cabinet meeting.

 “Seeing the devastation that these people have had to deal with, the last thing we want them to worry about is their insurance coverage,” McCarty said. 

McCarty said he would issue an order to facilitate Gallagher’s requests.  He also will seek to suspend rate filings until further notice so staff can assist residents and businesses with filing claims and recovery. 

 


GALLAGHER BANS PUBLIC ADJUSTERS FROM REQUIRING CASH UP FRONT AND CAPS EXCESSIVE FEES

Florida’s Chief Financial Officer Tom Gallagher issued an emergency rule banning public adjusters from requiring cash up front to adjust claims for victims of Hurricane Charley.  Gallagher also limited public adjuster fees to 10 percent of the claim amount to prevent Floridians from being overcharged.

“By limiting fees, it’s our hope that homeowners and business owners dealing with the aftermath of the storm know what to expect and aren’t scammed and gouged financially by public adjusters inflating their fees,” said Gallagher, who oversees the Department of Financial Services. 

Gallagher also said that while he was imposing a 10% cap on adjuster fees, policyholders are free to bargain with adjusters to get their services at lower rates.

Banning up-front payments also prevents individuals from taking a consumer’s money and then disappearing without ever performing the work, Gallagher added.  The emergency rule also gives consumers up to 14 days to back out of a contract without penalty. 

There are 400 licensed public adjusters in Florida.  An additional 300 have applied for emergency licenses.  Public adjusters, unlike company adjusters, operate independently and are not affiliated with any insurance company.  Company adjusters do not charge policyholders a fee.

Gallagher said it isn’t necessary for consumers to hire a public adjuster to get their insurance company to pay a claim. However, some people believe it is to their benefit to have someone knowledgeable about insurance on their side to negotiate with the insurer.

Gallagher also emphasized the need for residents to be cautious in dealing with insurance adjusters and repairmen.  Since Hurricane Charley made landfall on Friday, the department has fielded more than 4,700 calls from affected consumers, including pleas for help from those who believe they may have been victims of a scam.

Gallagher is urging residents to ensure any agent or adjuster with whom they deal is licensed.  They should have a copy of their license, but you can also call the department’s storm hotline - (800) 22-STORM (227-8676) to verify licensure.   Consumers can also report instances of unlicensed activity to the storm hotline or go to www.MyFloridaCFO.com and click “Report Insurance Fraud.”


OKALOOSA COUNTY COUPLE CHARGED IN FIRE DEATH

An Okaloosa County couple was arrested Monday evening in Dumas, Texas, on charges relating to a mobile home arson that occurred on May 2, 2004, at 148 Barks Drive, Lot 7, in Ft. Walton Beach. One occupant, Loretta Stanley, died in the fire. 

Felicia Kennedy, 46, and her husband Gary Kennedy, 40, also of 148 Barks Drive, Lot 7, are charged with arson, manslaughter and two counts of attempted felony murder. Detectives from the Sedgwick County, Kansas, Sheriff’s Office, the Dumas Police Department, and the Texas Rangers assisted in the apprehension of the Kennedys.  The Kennedys will be extradited to Okaloosa County to stand trial.

Detectives said the Kennedys intentionally set fire to the interior of the mobile home while Stanley and a man slept inside.  The man escaped with injuries, but Stanley collapsed in the bedroom and was unable to escape. Damage to the mobile home is estimated at $15,000. 

The Bureau of Fire and Arson Investigations is a law enforcement branch of the Division of State Fire Marshal that assists other state and local fire and law enforcement agencies in the investigation of fires of suspicious origin.  Anyone with information about this case or any incident of fire is asked to call 1-877-662-7766 (1-877-NOARSON). Information may also be mailed to The Bureau of Fire and Arson Investigations, 105A Lewis Street, Suite 103, Ft. Walton Beach, Florida, 32547.


Florida Department of Financial Services
Consumer Services HelpLine
(800)342-2762.