Double Deductibles Being Eliminated

The Florida House of Representatives Wednesday gave tentative approval to a plan that will reimburse homeowners who paid multiple deductibles from hurricane damage.

The plan had stalled in the Senate earlier this week, but is now back on track. Unless the bill is changed, condo associations could have trouble getting insurance or face huge increases.

An estimated 29,000 people who paid double hurricane deductibles will have until March 1 to file for a rebate with the state, under legislation Miami Sen. Rudy Garcia is guiding through the special session.

"We are going to be able to help them out up to $10,000 to help them pay for the deductible."

The bill sets aside $150 million from a state insurance fund. Homeowners will likely see a small increase over five years to cover the rebates.

The legislation also eliminates double deductibles for the future. That alone is expected to drive rates up by about a half percent.

The insurance industry believes the rebates will spark a second round of claim filing from people who suffered minor damage from a second or third storm and didn’t file a claim because it was below their deductible.

William Stander represents the Property Casualty Insurance Association and says, "Those people who we put under the subject of a partial deductible, those people are probably going to go ahead and file another claim so that they can get in line for the money that is due them under this program."

One unintended consequence has large condo associations screaming. Reinsurance for the umbrella policies covering the building and common areas has already been negotiated.

Sandy Safley of Poe Financial says eliminating the double deductible could force cancellations or huge rate hikes.

"The testimony was given during the both the House and Senate committees that rates could go up as much 30 percent, 30 to 37 percent."

The rebate of double deductible is only available to homeowners, not business property.

House and Senate leaders are still trying to work out a compromise and they don’t have much time. The special session is supposed to end Friday.