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An Unpleasant Surprise - Deductibles Apply for Each Hurricane

Some people who have had the misfortune of having their homes damaged by more than one hurricane this year have discovered that their deductibles apply...
September 21, 2004

Some people who have had the misfortune of having their homes damaged by more than one hurricane this year have discovered that their deductibles apply for each hurricane. This is proving to be an even greater burden to homeowners in 17 states where special hurricane deductibles were established following 1992's Hurricane Andrew to make insurance coverage more available and affordable in high risk areas.  After Andrew caused $15.5-billion in damage in 1992 ($20.3-billion adjusted for today's dollars), Florida's insurance market was decimated. A dozen insurers went insolvent; many of those that remained wanted to flee the state.
 
Florida Chief Financial Officer Tom Gallagher said he plans to push for legislation, either during a possible special session later this year or in the 2005 legislative session, that would take mandatory deductibles out of state law. Gallagher has said if he were insurance commissioner when the deductibles were approved in 1996, he would have fought the mandatory deductibles. Industry observers note that any change in the deductibles could make insurers reluctant to do business in Florida or other states prone to hurricanes. Florida State Sen. Steve Geller (D-Hallandale Beach) said he would prefer the creation of a national disaster fund to help pay for hurricane damage. Geller is currently President of the National Conference of Insurance Legislators (NCOIL).

The issue of multiple deductibles was one of the primary concerns of insureds, according to PIA agencies visited by PIA National President Carl Stoecklin and members of the Image Committee during a fact-finding visit in the Orlando area September 10.

Impact of Deductibles (Fort Lauderdale Sun-Sentinel, 9/12/04)

Multiple Deductibles a Common Practice (Insurance Information Institute 9/20/04)

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