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Gallagher: Insurance Rate Relief Is on the Way for Homeowners

5/6/2006

CONTACT: Tami Torres or Bob Lotane
(850) 413-2842 
 
TALLAHASSEE – Tom Gallagher, Florida's chief financial officer, tonight applauded state lawmakers for approving $715 million in insurance rate relief for property owners in Florida.  Since 2004, Gallagher has urged the Legislature to earmark surplus revenue collected during hurricane recovery to help homeowners deal with insurance assessments, hurricane repairs or hurricane preparation.
 
State lawmakers passed Senate Bill 1980 which directs $715 million be used to offset insurance assessments levied by Citizens Property Insurance Corporation for a deficit caused by losses during the 2005 hurricane season.  Under Florida law, the company's deficit must be paid through assessments on all Florida homeowners' insurance policies.
 
Gallagher said the legislature also set aside $250 million to help Floridians strengthen their homes to withstand hurricane winds, bringing the total relief for insurance costs to nearly $1 billion.  The $250 million allocation would be used to do free home inspections for homeowners and provide matching grants up to $10,000 for home improvements.
 
Following the Legislature convening this year's session, Gallagher offered the following statement:
 
 "Setting aside nearly $1 billion to help ease the burden of rising insurance costs is a huge victory for Florida's property owners.   
 
"We have collected millions in sales taxes during hurricane recovery and the fair thing to do was to give it back to Florida's families to deal with insurance costs.   This is not a bailout of Citizens; this is unprecedented rate relief for Floridians.
 
"In addition to insurance rate relief, we need long-term property insurance reforms that will help strengthen our market and improve availability.  Federal solutions and participation are necessary to ensuring a long-term victory for homeowners."
 
Gallagher has proposed several federal solutions, including creation of a national Catastrophe Fund, allowing tax-deferred catastrophe reserves for insurance companies, and creating federal tax-free Catastrophe Savings Accounts.