Consumer eViews

Volume 3, Number 30, July 24, 2006

Insurance is all about spreading risk, that's why it is important to think both short-term and long-term when it comes to planning for a potential storm or disaster.

Even though I no longer regulate insurance, I made recommendations this year regarding insurance reforms and am pleased that the Legislature adopted many of them, chief among them a measure saving homeowners millions of dollars on insurance bills. By using $715 million from the sales taxes paid during hurricane recovery, we're saving every homeowner from having to pay a 20 percent assessment on top of payments.

Equally as important, this department is overseeing a $250 million pilot program that will provide grant money to help homeowners get their homes inspected and storm-proofed. By strengthening your home to withstand future storms, you can reap an additional savings on your insurance premiums. To find out more about the mitigation program, visit

Unfortunately, these reforms alone are not enough. That's why I am continuing to fight for the creation of a National Catastrophe Fund, much like the one I helped create here after Hurricane Andrew. Since 1993, the Florida Hurricane Catastrophe Fund is estimated to have saved Florida homeowners more than $20 billion in insurance costs.

I also believe the federal government should allow homeowners to build savings tax-free to cover items like insurance deductibles and uninsured damages if their home is ever hit by a storm.

We must continue to work to mitigate our risks, both at home and as a nation. It is a responsibility we all share.

-- Tom Gallagher


Nearly 300 people attended the state’s unclaimed property auction Saturday in Jacksonville and raised more than $616,000 for Florida’s public school children.  Tom Gallagher, Florida’s chief financial officer, said he was especially pleased that most of those who attended were “first timers.”

“That means more people are learning about the unclaimed property program,” Gallagher said.  “We set a new record last fiscal year by returning more than $100 million worth of cash and property to owners and heirs from nearly 227,000 accounts, and we intend to build on that success.”

More than 488 lots – some 32,000 items – were sold at the day-long auction, held at the Embassy Suites Hotel.  A men’s 2.35-carat diamond ring drew the highest bid at $14,000.

A signed Babe Ruth photograph went for $3,000. 

The auction items were turned over to the state from abandoned safe deposit boxes. The Department of Financial Services, which Gallagher oversees, currently holds unclaimed property accounts valued at more than $1 billion, and has transferred more than $1.5 billion to the state’s school trust fund.

In addition to money and securities, unclaimed property includes tangible property such as watches, jewelry, coins, currency, stamps, historical items and other miscellaneous articles.

 Another auction will be held Aug. 25-26 in Tampa.

Claiming money or property turned over to the state is free, and at any time owners or their heirs can claim the money the items earn at auction. The department also has a website,, where owners or heirs can regularly check to see if the state is holding unclaimed property for them. They can also check by calling 1-88-VALUABLE.


The IRS is giving tax credits for many types of home improvements including adding insulation, replacement windows, and certain high efficiency heating and cooling equipment.  The maximum amount of homeowner credit for all improvements combined is $500 during the two-year period of the tax credit. This tax credit applies to improvements made from January 1, 2006 through December 31, 2007.


During 2006, individuals can make energy-conscious purchases that will provide tax benefits when filling out their tax returns next year. The new law provides tax credits for making your principal residence, which must be in the United States, more energy efficient and for buying certain energy efficient items. At the same time the law provides credits for various types of alternative motor vehicles, including hybrids.


A recent tax law change provides a tax credit to improve the energy efficiency of existing homes. The law provides a 10 percent credit for buying qualified energy efficiency improvements. To qualify, a component must meet or exceed the criteria established by the 2000 International Energy Conservation Code (including supplements) and must be installed in the taxpayer’s main home in the United States.

The following items are eligible:

  • Insulation systems that reduce heat loss/gain
  • Exterior windows (including skylights)
  • Exterior doors, metal roofs (meeting applicable Energy Star requirements).

In addition, the law provides a credit for costs relating to residential energy property expenses. To qualify as residential energy property, the property must meet certification requirements prescribed by the Secretary of the Treasury and must be installed in the taxpayer’s main home in the United States.

The following items are eligible:

  • $50 for each advanced main air circulating fan
  • $150 for each qualified natural gas, propane, or oil furnace or hot water heater
  • $300 for each item of qualified energy efficient property.

The maximum credit for all taxable years is $500 – no more than $200 of the credit can be attributable to expenses for windows.

Additionally, the new law makes a credit available to those who add qualified solar panels, solar water heating equipment, or a fuel cell power plant to their homes in the United States. In general, a qualified fuel cell power plant converts a fuel into electricity using electrochemical means, has an electricity –only generation efficiency of more than 30 percent and generates at least 0.5 kilowatts of electricity. Taxpayers are allowed one credit equal to 30 percent of the qualified investment in a solar panel up to a maximum credit of $2,000, and another equivalent credit for investing in a solar water heating system. No part of either system can be used to heat a pool or hot tub.

Additionally, taxpayers are also allowed a 30 percent tax credit for the purchase of qualified fuel cell power plants. The credit may not exceed $500 for each .5 kilowatt of capacity.

These items must be placed in service after Dec. 31, 2005 and before Jan. 1, 2008.


The Internal Revenue Service issued a notice on how commercial building owners or leaseholders can qualify for the tax deduction for making their buildings energy efficient. The notice establishes a process to certify the required energy savings in order to claim the deduction.

The commercial building deduction, which was enacted in the Energy Policy Act of 2005, allows taxpayers to deduct the cost of energy-efficient property installed in commercial buildings.

The amount deductible may be as much as $1.80 per square foot of building floor area for buildings that achieve a 50-percent energy savings target. The notice provides that buildings below the 50-percent threshold may, nevertheless, qualify for a deduction of up to 60 cents per square foot of building floor area if they meet a 16⅔-percent energy savings target.

Before claiming the deduction, the taxpayer must obtain a certification that the required energy savings will be achieved. The notice prescribes the content of that certification and the qualifications that must be met by the person providing the certification.

The notice also announces that the Department of Energy will create and maintain a public list of software that must be used to calculate energy savings for purposes of providing the certification. It also provides a process that software developers must use if they desire to have their software included on that list.


The tax credit for hybrid vehicles, which was enacted by the Energy Policy Act of 2005, may be as much as $3,400 for those who purchase the most fuel-efficient passenger automobiles and light trucks.

Hybrid vehicles have drive trains powered by both an internal combustion engine and a rechargeable battery. Many currently available hybrid vehicles may qualify for the tax credit.

Since taxpayers may claim the full amount of the allowable credit only up to the end of the first calendar quarter after the quarter in which the manufacturer records its sale of the 60,000th hybrid and/or advanced lean-burn technology motor vehicle, consumers seeking the credit may want to buy early in the year.

The phaseout period for a manufacturer begins with the second calendar quarter after the calendar quarter in which the manufacturer records its 60,000th sale. For the second and third calendar quarters after the quarter in which the 60,000th vehicle is sold, taxpayers may claim 50 percent of the credit. For the fourth and fifth calendar quarters, taxpayers may claim 25 percent of the credit. For quarters after that fifth quarter, taxpayers may not claim the credit.

For example, F Company is a manufacturer of hybrid motor vehicles, but not advanced lean burn technology motor vehicles. F Company sells its 60,000th hybrid car on March 31, 2006.

  • Ms. Smith buys an F Company hybrid car on June 30, 2006, and claims the full credit.
  • Ms. Maple buys an F Company hybrid car on Dec. 31, 2006, and claims 50 percent of the credit.
  • Mr. Grey buys an F Company hybrid car on June 30, 2007, and claims 25 percent of the credit.
  • Mr. Green buys an F Company hybrid car on July 1, 2007, and is unable to claim the credit, because the credit has phased out for F Company vehicles.

Tax credits are available for purchasing certain other vehicles.

Fuel cell vehicles are propelled by power derived from one or more cells which convert chemical energy directly into electricity by combining oxygen with hydrogen fuel. For passenger automobiles or light trucks, the maximum allowable credit is $12,000 but greater credits are available for heavier vehicles.

Alternative fuel vehicles include those fueled by compressed natural gas, liquefied natural gas, liquefied petroleum gas, hydrogen, and any liquid that is at least 85 percent methanol. The maximum allowable credit for vehicles weighing 8,500 pounds or less is $4,000.

Hybrid heavy trucks: For qualifying hybrid motor vehicles weighing more than 8,500 pounds but not more than 14,000 pounds, the maximum allowable credit is $3,000. For qualifying hybrid motor vehicles weighing more than 14,000 pounds but not more than 26,000 pounds, the maximum allowable credit is $6,000. For qualifying hybrid motor vehicles weighing more than 26,000, the maximum allowable credit is $12,000.


With an increase in calls from people regarding foreclosure, the Department of Financial Services is aware of the problems that can occur when cash is tight.  Due to the rise in interest rates and the cost of homeowners insurance, Florida could have a record number of mortgage foreclosures in the next few years.

If you get behind and miss mortgage payments, foreclosure may occur. This is the legal means that your lender can use to repossess (take over) your home. When this happens, you must move out of your house. If your property is worth less than the total amount you owe on your mortgage loan, a deficiency judgment could be pursued. If that happens, you not only lose your home, you also would owe your lender an additional amount.

Both foreclosures and deficiency judgments could seriously affect your ability to qualify for credit in the future. So you should avoid foreclosure if possible.

Do not ignore letters from your lender.  If you are having problems making your payments, call or write to your lender's Loss Mitigation Department without delay. Explain your situation and be prepared to provide them with financial information, such as your monthly income and expenses. Without this information, they may not be able to help.

Stay in your home for now because you may not qualify for assistance if you abandon your property.

Contact a  housing counseling agency. Call (800) 569-4287 or TDD (800) 877-8339 for the housing counseling agency nearest you. These agencies are valuable resources that frequently have information on services and programs offered by government agencies as well as private and community organizations that could help you. The housing counseling agency may also offer credit counseling. These services are usually free of charge.

Consumer Services HelpLine (800) 342-2762

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