Draft legislation being circulated by the governor would reimburse Florida homeowners who got hit by more than one storm and double deductibles this hurricane season.
The rub is that every homeowner in the state will pick up the $150 million tab through a small increase in insurance rates.
An estimated 29,000 homeowners have filed damage claims from more than one hurricane and have been forced to pay at least double deductibles.
This plan being circulated by the governor would use $150 million from the states catastrophic reinsurance or CAT fund to reimburse homeowners up to $10,000 for double deductibles.
Florida’s insurance industry is on board with the rebate, but Sam Miller of the Florida Insurance Council has some concerns going forward.
"Now there are other issues that we haven’t seen the details of yet including allowing consumers to choose the size of their deductible and say maybe one to five percent. We are still looking at that, we do have some concerns for that."
If approved as written, the plan calls for the $150 million to be reimbursed to the CAT fund through higher premiums over the next five years.
How much gets tacked on to everybody’s premium to cover the cost of reimbursing double deductibles will depend on the number of claims and their size, but right now the average looks like it will be about $5 a year for five years.
When lawmakers meet next week, it is unclear if they will eliminate double deductibles for the 2005 hurricane season.
Rep. Allen Bense of Panama City is the Speaker of the House and says, "If we don’t have good numbers on some these issues then perhaps they will wait until regular session."
Regardless of when it happens, eliminating double deductibles all together is not without cost. The insurance industry estimates rates will have to go up by 15 to 18 percent.
The state Legislature will consider the double deductible dilemma during a special session next week.
In other insurance news Monday, auto owners insurance informed the state it will be dropping all 3,000 mobile homes the company insures in Florida.