Consumer eViews

Volume 1, Number 40, October 4, 2004     

It’s Fire Prevention Week. 

This time next year, when I look back 12 months, I hope to be able to say that no Floridian died as a result of fire.  I’d like to ask you to help me make that possible. 

First, make sure you have working smoke alarms in your home and in your office. Working smoke alarms were present in fewer than 5 percent of the 58,000 fire incidents reported to the State Fire Marshal’s Office in 2003, and 109 Floridians died in those fires. 

Sit down with your family, make an escape plan and practice it.  Do the same at the office.  Each year, fire claims the lives of Florida’s elderly more than any other age group.  The second group most often killed or injured in fires is children. 

Also, please visit for more fire safety tips and information. 

Our citizens are struggling to recover from the impact of four hurricanes that struck our state in a span of less than two months.  We can’t do anything to avoid a hurricane, but we can do a lot to protect ourselves from the risk of fire.   

                        -- Tom Gallagher


Hurricane Jeanne recently claimed its seventh Florida victim, but not with wind or rain.  

In Port St. Lucie, a Waste Management worker was electrocuted when a downed power line set fire to his truck.  It was one more reminder of the grim hazards fire poses as Florida observes Fire Prevention Week, Oct. 3-9. 

“Every year, fires claim the lives of many Floridians, and injure hundreds of others,” said Florida’s Chief Financial Officer and State Fire Marshal Tom Gallagher. “But there are steps we can take to protect ourselves and reduce our risks of being injured by fire. One of the simplest but most important steps is to install a smoke alarm in your home or business—and make sure it works.” 

Statistics bear this out.  Working smoke alarms were present in fewer than 5 percent of the 58,000 fire incidents reported to the State Fire Marshal’s Office in 2003, and 109 Floridians died in those fires. 

“It’s a simple job, but it can mean the difference between life and death,” Gallagher told about 40 senior citizens at a Fire Prevention Week kick-off program at Georgia Belle Apartments, a Tallahassee independent living facility where 10 years ago more than 100 people were injured in an early morning fire.  Gallagher told them that fire claims the lives of Florida’s elderly more than any other age group.

To combat that sobering trend, the Department of Financial Services and State Fire Marshal’s Office have teamed up with the Department of Elder Affairs to launch a new education program targeting the state’s seniors.  The new educational package will be distributed to fire departments throughout the state, and includes training materials and a DVD with tips and tools to help local firefighters and fire safety educators provide the elderly with information that can save lives.

The State Fire Marshal’s Office also continues to place special emphasis on education for children.  The department’s “Safe House Mouse” program offers tips for kids and suggestions for parents and teachers to share practical advice on how to prevent and escape fire.  That program can be found at  And, the State Fire Marshal’s Office has created fire-safety bookmarks specifically targeting third-graders.

The State Fire Marshal’s Office is also promoting fire safety at the state’s colleges and universities. This week, fire prevention specialists will be visiting university campuses to draw attention to the special risks students living away from home for the first time can face.   The specialists will be armed with a new campus fire safety video the State Fire Marshal’s Office produced.  Another new program geared toward college students is “Candle with Care.”  

“Floridians have endured a great deal this year,” Gallagher said, referring to the hard-hitting hurricane season. “As we come together to recover after these extraordinary events, it’s also important that we remember the everyday precautions that can protect us from further tragedy.” 

(as of September 28, 2004) 

ESTIMATED INSURED DAMAGES (Estimates based on data call through the Office of Insurance Regulation)

Hurricane Charley: $6.5 Billion
Hurricane Frances: $3 Billion
Hurricane Ivan: $1 to $3 Billion

Claims filed to date: More than 1 million (one in every five homes damaged). Expect as many as 2 million claims to be paid out. 

Hurricane Jeanne: $4 to $8 Billion (Industry estimates)


The Hurricane Catastrophe Fund (Cat Fund) provides reinsurance to insurance companies writing homeowners coverage in Florida.  It was created after Hurricane Andrew to ensure companies could quickly pay claims after a major hurricane and still have the ability to write coverage.  The Cat Fund also offsets rising homeowners’ premiums because insurance companies are purchasing reinsurance at significantly lower prices than what is available in the private market. 

 The Cat Fund currently provides $15 billion of capacity, or reinsurance.  It has a current cash balance of $5.6 billion and is expected to make all payments for reinsured losses from the recent back-to-back storms with available cash. 


Citizens Property Insurance Corporation, Florida’s unique insurer of last resort for consumers unable to obtain property insurance coverage from the private market, was created by the Florida Legislature just two years ago to achieve tax savings ($300 million to date) and enhance consumers’ access to comprehensive coverage.  Citizens currently provides coverage for 815,000 policyholders.

To date, approximately 78,000 claims from the recent storms have been filed totaling more than $1.8 billion.    Until we know the extent of damage and claims from all four storms, it is impossible to determine the financial impact to Citizens and Florida policyholders in general.  However, we do expect claims to be paid in a timely, efficient manner. 


  • Instituted a moratorium on insurance companies canceling or non-renewing homeowners during hurricane season or because they have filed a storm claim.
  • Working with insurance companies and policyholders to resolve cases involving multiple deductibles.
  • Placed a 10 percent cap on what public adjusters can collect on a homeowner’s insurance claim and prohibited them from charging fees up front.
  • Required Florida’s health insurers and HMOs to waive restrictions on prescription refills to enable citizens to fill prescriptions in advance. 
  • Urged banks and credit unions to expedite loan applications, eliminate late fees on loans and waive ATM and check-cashing fees for storm victims.
  • Mediation centers will soon be open in key areas to ensure consumers have a program in place, at no charge to them, to quickly and fairly resolve claim disputes.



  • Since August 13, the day Hurricane Charley made landfall, the department has received more than 40,000 calls and is currently working on nearly 11,000 consumer requests for assistance.
  • After each storm, mobile response units were deployed to impacted areas and mobile command centers were up and running within 72 hours of landfall. 
  • More than 150 department employees are in the field providing insurance help, with the assistance of 30 insurance experts from eight other states.
  • There are 35,000 adjusters now working storm claims. Of this number, 11,000 emergency adjuster licenses were issued to expedite the payment of insurance claims.


  • Coordinated 230 search and rescue missions –mobilizing more than 400 local firefighters.
  • Cleared access routes to help emergency responders get into damaged areas.
  • Provided law enforcement to prevent looting and other crimes associated with natural disasters, including insurance scams and price gouging.
  • Four arrests to date of unlicensed adjusters.



American Superior Insurance Company, an insurer that writes homeowners insurance coverage for nearly 60,000 Floridians, voluntarily consented to be put into rehabilitation in response to losses sustained by the recent back-to-back hurricanes. The company’s premium volume in 2003 was $34 million, representing less than 1 percent of the total homeowners insurance market.

The Florida Department of Financial Services, Division of Rehabilitation and Liquidation, will serve as receiver for the company. As receiver, the department will take over the company’s operations and work to get claims resolved.

“Our number one priority will be to take care of policyholders with storm claims,” said Florida’s Chief Financial Officer Tom Gallagher, who oversees the department.

According to Gallagher, the department, as receiver, plans to hire more claims adjusters to handle the increased claims workload brought on by the recent storms.

Gallagher said the department has also established two toll-free numbers to assist policyholders. Policyholders who need to report a claim for the first time should call 1-800-270-8043. Policyholders with existing claims can call 1-866-928-4312. Policyholders can also report a claim by contacting their agent or following the claims reporting directions on the company’s website at

Under the receivership terms, no policyholders will be cancelled.


Q: Do insurance companies cover temporary housing if a house is unlivable?
A: Yes, additional living expenses are covered initially, generally at a rate of 10 to 20 percent of the value of the dwelling.

Q: With concerns about mold growing from moisture damage, do I have to wait for an adjuster to survey the damage before doing work?
A: Temporary repairs can be done and are encouraged to mitigate further damage and help protect the integrity of the house. Take before and after photos and keep all receipts if you want to reimbursed for repairs.

Q: Should I report my claim or wait?
A: Report your claim as quickly as possible.

Q: How do I know which policy to file my claim under (homeowners, flood, windstorm)?
A: File your claim with all three policies, the adjuster(s) will take care of determining which policy or policies cover your loss.

Q: Should I paint my insurance company name and policy number on my house?
A: If forced to evacuate, take your insurance company contact info with you. If your house is uninhabitable, then put your insurance company's name on a piece of wood and prop it up against the house. NEVER put the policy number or you could be left vulnerable to scam artists.

Q: How long should it take for an adjuster to come to my house and assess the damage?
A: It depends on the severity of damage caused by the storm. Adjusters come into the disaster areas as soon as permitted by emergency officials. Call 800-22-STORM for help with this issue.

Q: What is a public adjuster? What should a storm victim know about adjusters?
A: There are adjusters who work for insurance companies, and there are public adjusters who work under a contract with a homeowner and receive a percentage of the settlement. CFO Tom Gallagher issued emergency rules after Hurricane Charley banning public adjusters from requiring cash up front and limiting fees to no more than 10% of the claim. These rules are still in effect.

Q: Is there any financial help available for people who are uninsured?
A:  Contact FEMA at 1-800- 462-9029.

Q: What about financial assistance for deductibles?
A:  You can contact FEMA at 1-800-462-9029 to apply for assistance.  FEMA will first refer your application to the Small Business Association (SBA) to see if you will qualify for a low-interest loan.  If you do not qualify for a loan, then FEMA will evaluate your application for further assistance with grants.

Q: What if I have damage from Hurricane Charley and now from Hurricane Frances, Ivan or Jeanne? Will I have to pay a second deductible?
A:  A majority of insurance policies require one deductible per event. CFO Gallagher recognizes the financial hardship this may cause many Floridians.  Consumers who sustain additional damage from a subsequent storm should call the department and we’ll work with the consumer and the insurance company to determine if back-to-back storm damage is considered a single event.

Q: Charley caused several billion dollars in damage. If more storms hit, will my insurance company go bankrupt?
A: The insurance industry learned its lesson from Hurricane Andrew. At that time, rates were woefully inadequate and as a result, nearly a dozen insurance companies became insolvent and several others stopped writing and starting non-renewing customers. Since then, rates have increased significantly so money was available to pay claims should another catastrophic storm make landfall in Florida. At this time, the insurance industry is financially prepared for a $25 billion event.

Q: With more storm hits, will my insurance rates go up?
A: There are a number of factors that contribute to the rising cost of insurance. However, we do not anticipate rates to rise with the damage sustained during Hurricane Charley. It is too early to speculate what changes will happen, if any, due to Frances, Ivan or Jeanne.

Q: Will another storm result in my insurance company going bankrupt?
A: Insurance companies operating in Florida are well capitalized and are required to have reserves and reinsurance in preparation for a catastrophic storm. Frances, Ivan and Jeanne, on the heels of Charley, will certainly have a financial impact on the industry but we don't know the extent of insured damages at this time. The Office of Insurance Regulation is carefully monitoring the financial health of the industry.

Q: What did we learn from Hurricane Andrew?
A: : We learned to take hurricane warnings seriously, and understand the need for better coordination among federal, state and local agencies, and the need for stronger building codes. The experience of Andrew spurred the creation of the catastrophe fund and insurer of last resort.

Q: Floodwaters damaged the first floor of my house and wind tore off the roof.  Will my insurer pay for the repairs of all of my damage?
A: Your homeowner’s insurance policy should cover the roof damage, minus your deductible.  If you don’t have flood insurance, however, you may be in trouble.  Most homeowners’ policies cover wind damage — not flood damage.  Flood insurance is underwritten by the federal government and provided through the National Flood Insurance Program. 

Q: The storm flooded my expensive landscaping and uprooted a tree which then tore up my roof.  Will my policy cover replacement of my plants and tree?

A: Because the tree has damaged an insured building your insurance company should pay to repair the roof – and remove the tree in the process.  However, most policies do not provide for damaged landscape – including trees – to be hauled away or replaced if the damage doesn’t directly impact an insured structure.

Q: My agent says the claim check will be made out to me and the bank who holds my mortgage.  Why?
A:  Your insurance company will consider that the bank also owns the house, and as a result, also has a claim on your insurance – so in many cases the check will be made out to both parties.  Your bank should be cooperative with you about getting the check cashed because it has vested interest in getting you the money you need to repair the damage.

Q:  My policy calls for me to be reimbursed the amount it costs to replace my loss.  The agent says I will get two checks from the insurance company.  First, they will pay the depreciated value.  Later, after the damage is repaired, the agent says they will pay the balance of the replacement cost.  What does that mean?
A:   Many policies will allow this.  The insurance company can pay you for the depreciated value of your loss.  Once the repair is made and you have a receipt showing the repair expense, the company must reimburse you the full amount up to policy limits.



Consumer Services HelpLine