Consumer eViews

Volume 1, Number 43, October 25, 2004     

A hurricane can inflict incredible physical destruction, but it also brings chaos into people’s lives.  Even in the best circumstances, many citizens can find the process of rebuilding their lives and property extremely stressful. Realizing this, Florida’s Department of Financial Services is implementing a mediation program to assist residents who are struggling to reach an agreement with their insurance company. 

This program is being set up as an alternative to the costly and time-consuming process of litigation, and is free of charge to policyholders, making it an attractive option for many.  Individuals should not be forced to hire an attorney and go to court in order to be treated fairly by their insurance company.   

It is important to remember that, prior to filing for the mediation process, consumers should first call the Department’s toll free hurricane helpline at 1-800-22-STORM and let one of our staff assist you with your insurance claim.  We have fielded over 70,000 calls to date and are working with policyholders to quickly and satisfactorily resolve disputes.   

Experience shows that mediation is an exceptional way for consumers to quickly settle their insurance disputes.  Following Hurricane Andrew, I established a mediation program very similar to the one we are currently implementing.  The results were extremely encouraging, as almost 90 percent of consumers walked away satisfied.  However, using mediation does not preempt your right to pursue other legal remedies. 

After requesting mediation, an insurance carrier has 21 days to try to resolve the disputed claim.  If unresolved, a mediation meeting must be scheduled within 20 days.  Following Andrew, many consumers were able to come to an agreement with their insurance company during that twenty-one day period. 

Realizing, however, that policyholders and companies may not always be able to come to an agreement, we feel that mediation is an excellent option for the consumer.  If you are a consumer who feels that mediation is the appropriate remedy for your insurance claim, there are a few important things to keep in mind when preparing for your meeting.             

  • It is helpful to review your policy and be familiar with its specifics.  Bring it with you to the mediation center.
  • Gather any documentation you may have regarding your insurance claim.  This may include, but is not limited to:  estimates from contractors, engineer reports on structural damage, any correspondence you’ve had from your insurance company, photographs documenting damage and receipts for any temporary repairs you have made.
  • If you are a citizen who speaks a language other than English, it is your responsibility to bring someone to translate for you.

I recognize and understand the frustration and personal hardship that results after a devastating hurricane moves through.  That’s why we at the Department of Financial Services are committed to assisting customers who are having trouble navigating the murky waters of insurance.  Our mediation program has an established track record of success, and I am confident that it will prove once again to be an effective program for residents impacted by the storms.

                        -- Tom Gallagher


Florida’s Chief Financial Officer Tom Gallagher today asked state regulators to develop an emergency rule directing insurance companies to speed up their efforts to resolve hurricane claims, and setting specific deadlines for companies and their adjusters to evaluate damage and start the claims process.

Gallagher said the rule should be brought to the Governor and Cabinet next Tuesday, October 26, for approval.

Gallagher said firm deadlines are necessary based on numerous calls to the department’s hurricane hotline at 1-800-22-STORM from storm victims who have yet to see an adjuster or are waiting for an adjuster to return to do a damage assessment.

“One of our top complaints continues to be delays working with a claims adjuster,” said Gallagher, who oversees the Florida Department of Financial Services. “Setting deadlines will help thousands of Floridians who are still waiting to start the claims process.” 

Gallagher has asked the Office of Insurance Regulation to develop a rule that would require insurance companies to take the following actions for consumers who have filed claims:

  • Advance funds to all storm victims entitled to additional living expenses.
  • Send adjusters to evaluate and assess damage.
  • Make a settlement offer and work to resolve all claims.

"I have been out working to help storm victims recover from these back-to-back catastrophes. We are listening to their concerns and we understand that getting their insurance check is a necessary first step toward rebuilding their homes and their lives,” said Gallagher.

Gallagher said a similar rule was implemented two months after Hurricane Andrew made landfall in 1992.


In response to hundreds of calls from homeowners and construction contractors, both in and out-of-state, concerned about Florida requirements for workers’ compensation insurance coverage, the Florida Department of Financial Services is reiterating the responsibilities of contractors under state law.

Under Florida law, construction employers with one or more employees must provide workers’ compensation coverage for their employees. Construction employers who are corporate officers or members of a limited liability company can exempt themselves from coverage if they obtain an exemption from the Department of Financial Services’ Division of Workers’ Compensation. In addition, out-of-state contractors must obtain a Florida policy or a policy endorsed by their current carrier using Florida rates.

The department remains concerned that homeowners who employ an uninsured contractor may be held financially responsible if an injury occurs during repairs. 

For contractors unable to secure coverage in the private market, the Florida Workers’ Compensation Joint Underwriting Association, Inc. (FWCJUA), the state’s insurer of last resort for workers’ compensation insurance coverage, is offering a streamlined process for obtaining coverage. Employers who enter into a payroll service and premium deduction program with the FWCJUA, and pay a processing fee, will be eligible to receive a policy within one business day and will save up to 76 percent in up-front premium costs, depending on their payroll amounts. This initiative will allow contractors, especially out-of-state contractors, to pay a smaller portion of their premiums up front so they can quickly assist homeowners with repairs and rebuilding. Contractors may contact the FWCJUA at 941-378-7400 or on the web at

The department has, since Hurricane Charley struck in mid-August, aired radio and television public service announcements advising contractors of their responsibilities under the law and urging homeowners to ensure they are dealing not only with a licensed and reputable contractor, but also one covered by workers’ compensation insurance. The department has also distributed printed materials and made information available on its website at


Military service comes with its own degree of stress. Add financial mismanagement and poor planning to the mix and a tough situation can be worse for those lacking knowledge and experience. In an effort to better protect those who serve and defend our freedom, the Florida Department of Financial Services has been working with military bases throughout the state to provide basic financial information to junior enlisted service members and their commanding officers.

One base that department staff is actively involved in is the Naval Air Station in Pensacola. NAS Pensacola -- fondly known as the Cradle of Aviation -- began as a navy yard in the early 1800s. Two years after the first aircraft carrier was built, the navy yard at Pensacola became an aviation training station, and it remained the only naval air station in the country until the United States entered World War I. After World War I, approximately 100 pilots per year graduated from NAS Pensacola. By the time the United States was involved in World War II, NAS Pensacola was training 1,100 cadets per month. Thousands of pilots still train there today.

Not everyone stationed at NAS Pensacola is an officer training to become a pilot. Thousands of junior enlisted come through NAS Pensacola every year. For some, Pensacola will be a temporary duty station where they will receive a few months of training before being stationed elsewhere. Others will call Pensacola home for two or three years.

Junior enlisted service personnel are typically between 18 and 25 years old, and earn the least amount of money in the military. Most are single. While their base pay, along with benefits like housing, meal allowances, and medical care can be enough to make ends meet, many find themselves in financial trouble. One unwise financial decision can prompt them to head straight into the clutches of an unscrupulous predatory lender.

Without the proper budgeting skills necessary to make this money last, junior enlisted are prime candidates for a payday loan when faced with an unexpected bill. In Florida and other states, payday lenders have sprouted along the roads leading to the gates of military bases. Many who use payday loans can’t explain how much it actually costs them in terms of fees and interest charges. Another option that appeals to the desperate is the title loan, where the lender takes ownership of their car title in exchange for a cash loan. Defaulting on a title loan could mean loosing a primary means of transportation.

Used car lots are another area for military personnel to be cautious about financial transactions. Some lots sell cars to the junior enlisted at inflated prices. They know exactly how much these men and women earn and structure loans “on paper” to appear to be an affordable monthly car payment. In reality, the loan may include other fees and charges that result in a payment far beyond the value of the car. It’s no coincidence that these businesses are set up just outside the base, and many will pay cab fare in order to get the first time car buyer on the lot. Many of these companies also run ads in the local base newspaper, leading many service members to believe that the base officially sanctions the companies.

According to Nina Lohr-Valdez, Director of the Navy Marine Corps Relief Society at NAS Pensacola, the biggest problem facing the typical junior enlisted service member is lack of knowledge and little experience in managing personal finances. Lohr-Valdez says many have just graduated from high school, and have never set up a monthly budget.

Unfortunately, targeting the military is not a problem unique to Pensacola. All over the country, and in some cases, overseas, our service members are being targeted. Unsuitable offers of insurance, investments, car loans, computers, and frozen food plans, just to name a few, are pitched specifically to the military, usually in the guise of some sort of military affiliation. Offers seem more legitimate when they come from one of their own.

We are working closely with the bases throughout Florida to help educate our young service men and women. In fact, a brochure has been specifically designed for consumers between 18 and 25 years old entitled Wheels, Deals, and Spiels: A Financial Guide for Young Consumers. It contains information about car loans, insurance, credit cards and scoring, predatory lending, and identity theft.

In June, Florida’s Chief Financial Officer Tom Gallagher urged state regulators to require insurance companies operating in Florida to give special consideration to service personnel who experience lapses in their insurance coverage due to deployment overseas.


If you have ever relied on a “grace period” when you write a personal check, you should be aware of a new federal law that now allows your checks to be “cashed” on the spot.

Effective October 28, many Florida banks will begin an electronic check conversion process known as Check 21. Check 21 is a federal law that allows for the processing of personal checks in real time, which means funds can be immediately accessed from your bank account.

Electronic check processing is not new to the financial industry but as more banks use Check 21, those on fixed incomes who may have relied on a grace period when paying bills could be impacted.

“Always make sure you have enough money in your account to cover the checks you write at the time you write them,” said Tom Gallagher, Florida’s Chief Financial Officer.

Here’s how it works and what to expect: Instead of physically moving paper checks, banks will process checks electronically. An image of the check, both front and back will be sent instantly to the bank where the money will be withdrawn. That means you may begin to receive a substitute check instead of your original canceled check with your account statement.

Gallagher said Floridians can also tap into advice on managing monthly bills by logging on to

For more information about Check 21, check out the Federal Reserve Board’s website at


Florida's Office of Financial Regulation recently assisted the U.S. Securities and Exchange Commission (SEC) in an investigation of Learn Waterhouse, Inc., an investment company with offices in Jacksonville, which led the SEC to order the company to cease and desist selling of investments. The order also froze Learn Waterhouse's assets and appointed a temporary receiver for the company.

SEC officials allege that Texas-based Learn Waterhouse, with principals Randall T. Treadwell, Savannah, Georgia; Rick D. Sluder, Tyler, Texas; Larry C. Saturday, Savannah; Georgia and Anulfo M. Acosta, Pasadena, Texas, raised more than $24 million to fund phony investments. More than 600 Florida investors lost a total of $15.7 million.

The investigation was conducted jointly and involved the SEC, the Florida OFR, the FBI and securities regulators in several states.

Commissioner Don Saxon, Florida Office of Financial Regulation stated, "This investigation is an example of multiple agencies and States successfully teaming against investment fraud. OFR encourages Florida investors who dealt with Learn Waterhouse to come forward and discuss their transactions with them. They may do so by calling upon the Jacksonville investigators at (904) 798-5808."

Potential investors are encouraged to verify that they are dealing with a licensed securities dealer and that investments are registered. For more consumer tips or to file a request for assistance, log on to
The Department of Financial Services' toll free consumer helpline is also available at 1-800-342-2762 from 8:00 a.m. to 7:00 p.m. E.S.T., Monday-Friday.

Consumer Services HelpLine
(800) 342-2762.