FIRM's Florida Insurance Rights Mandate

Article Courtesy of The KEYNEWS

Published  October 10, 2006

Fair Insurance Rates in Monroe has drafted a legislative agenda for changes to the state's windstorm insurance system, and is asking political candidates to support the changes. The group's bill of rights for insurance consumers, entitled Florida Insurance Rights Mandate, includes the following:

l Fair "use and file" provisions. The state's use and file statute allows insurance companies to file a rate request and simultaneously charge customers the increase. FIRM wants that statute changed, arguing that insurance companies should not be allowed to increase rates within a 12-month period by more than 10 percent without filing for and receiving approval.

l Use windfall tax revenues from storms to offset rising premiums. Sales tax revenues resulting from consumer purchases to rebuild homes after a storm should be used to replenish the Florida's catastrophe fund and offer new re-insurance options to help lower rates.

l Itemize bills. Consumers have a right to know everything that goes into their insurance bills. Every bill should include a full description of the property, a listing of mitigation credits and details of every calculation, including the base rate, used to arrive at the total due.

l Set base rates in accordance with the Florida public hurricane model. The model was tested against actual damage from Hurricane Wilma and proved to be far more accurate than insurance companies' private models. As required by the state insurance commissioner, the public model should be used to establish windstorm rates unless private model methodology and calculations are made public.

l Rates for "take-out" companies. Insurance companies should not be entitled to take customers out of the insurer of last resort and set rates that are not competitive and unaffordable.

l Programs to harden homes. Use public funds to fortify homes throughout the state against potential hurricane damage in order to limit the liability of insurance companies and encourage more private companies to return to the Florida market. This should be a permanent part of the state budget.

l Fair coverage amounts. Property owners should not have to carry replacement value wind coverage because if a major hurricane hits a coastal area, the majority of damage will most likely come from flooding rather than wind.

l Uniform building codes. Areas with similar risks for wind-borne damage should be subject to the same building codes.

l Base rates on building strengths. Rather than relying on arbitrary factors such as the age of a home, insurance companies should recognize factors that have made homes stronger and areas that have stricter codes.

l Flexible payments. Allow installments and credit card payments.

l Timely and reasonable claim processing. Require timely payment of documented claims. Claims should represent the real cost of repair and rebuilding in the policyholder's locale.