GALLAGHER OFFERS COMPREHENSIVE SOLUTIONS TO BETTER PROTECT HOMEOWNERS AND STRENGTHEN PROPERTY INSURANCE MARKET
Tom Gallagher, Florida’s chief financial officer, outlined several proposals for strengthening Florida’s property insurance market and better protecting homeowners and condominium unit owners from financial devastation after a hurricane strikes. Gallagher also gave his support for federal solutions being advocated by Governor Jeb Bush and key congressional leaders.
“Eight catastrophic storms in 15 months have caused more than $32 billion in insured damages, and Florida homeowners will bear the brunt of this burden if we don’t act now to implement solutions to prevent an insurance market meltdown,” said Gallagher, whose office has received nearly 600,000 phone calls from storm victims in the last year. “It will take a comprehensive approach to tackle the challenges that we face as a state.”
As part of a multi-faceted package to address insurance issues, Gallagher advocated both federal and state solutions. At the federal level, Gallagher is urging Congress to establish a national catastrophe fund, for which he lobbied following Hurricane Andrew
in 1992, and to create individual Catastrophic Savings Accounts (CSAs) to allow homeowners to save tax-free for deductible and storm recovery costs. He is also recommending Congress pass U.S. Representative Mark Foley’s legislation to allow the accumulation of tax-deferred catastrophic reserves by insurers.
“Catastrophic Savings Accounts would give Floridians the opportunity to save money tax-free to pay insurance deductibles and uninsured losses, as well as to strengthen their homes against hurricanes,” Gallagher said. “Money would grow over time to better protect Floridians from the financial threat of hurricanes.”
On the state level, Gallagher asked the Legislature to earmark the sales tax revenue collected from hurricane recovery to help offset assessments against homeowners. Gallagher also called for standardizing Florida’s building code statewide and capping coverage of homes at $1 million or less in Citizens Property Insurance Corporation, the state’s insurer of last resort.
“Floridians pay millions in sales tax to recover from catastrophes. They should not be taxed twice,” said Gallagher.
Gallagher is also initiating expansion of his mediation program to condominium communities. The mediation program, established following multiple hurricanes in 2004, has been utilized by more than 11,000 homeowners in disputes with their insurance companies, with a 92 percent settlement rate.
Since last year, the Department of Financial Services has assisted nearly 600,000 Floridians with questions and requests for help after the hurricanes. The Department has advocated on behalf of nearly 61,000 consumers struggling with their insurance companies. Eighty-eight percent of those complaints were resolved in favor of consumers, a total of 54,000 families helped.
Additionally, the Department, working with Governor Bush and the Legislature, reimbursed $43 million to hurricane victims burdened with multiple hurricane deductibles. Gallagher also led the successful fight to eliminate multiple storm deductibles during one hurricane season.
This past spring, the Department hosted seven town hall meetings across the state where thousands of Floridians were provided direct on-site help with resolving their insurance claims.
“Small homeowners throughout the state should not have to bear the burden of billions of dollars in hurricane damages,” Gallagher said. “If we act now, we can make sure that property insurance remains available and affordable."