Provisions of the Legislature's insurance proposal

01/22/2007 © Tallahassee Democrat

Legislative staff is still hammering out the wording that will make this a deal, but here are the general agreements lawmakers made over the weekend on a property insurance bill to be voted on today:

Double the coverage provided insurance companies under the Florida Hurricane Catastrophe Fund, with the expectation it will lower private insurance rates 5 percent to 30 percent. Florida consumers and businesses are exposed to a potential $70 billion in assessments if the fund is wiped out in multiple years.

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Repeal rate hikes at Citizens Property Insurance and freeze premiums for one year at 2006 levels, a 75 percent savings on average.

Delete the requirement that Citizens charge more than the private market. However, homeowners are still not eligible for Citizens coverage if they are offered private insurance, no matter what the price.

All businesses in Florida unable to find commercial hurricane insurance are eligible for coverage through Citizens Property Insurance. Citizens is allowed to set minimum mitigation requirements for coverage.

Homeowners can buy a policy without hurricane coverage, if they provide proof that their mortgage lender agrees.

The sky is the limit on how large of a storm deductible a homeowner accepts, but for homes under $500,000, any deductible over 10 percent requires lender approval.

Insurance companies are also required to offer policies excluding coverage of the contents of a house.

Insurers must give customers 100-day warning if they intend to drop their policy during hurricane season.

Insurers can't deny coverage of a home simply based on its age and must consider wind resistance of the structure.

National insurers must put a minimum of $50 million behind their Florida-only subsidiaries, 10 times the requirement of other insurers.

Beginning in 2008, companies that sell home insurance in other states must also offer it in Florida if they wish to do other business here.

State home mitigation grants may also be used to rebuild previously inspected structures after a storm, or to repair low-income housing in order to prepare it for mitigation.

Wind mitigation inspectors would be regulated.

The Florida Building Commission is prohibited from weakening storm protection codes, and must delete the option for builders to substitute door and window protection with internal strengthening for new homes in high-wind areas statewide.

New homes built within 2,500 feet of the Coastal Construction Line must be built to tougher state standards to be eligible for coverage under Citizens Property Insurance.

Hospitals, community associations and local governments can form their own insurance pools.

Insurance companies can offer customers discounts for buying more than one policy from them, but those discounts must be tied to reduced costs.

Lower the eligibility requirements and set aside $7 million for new insurance companies willing to write mobile home coverage.

Repeal a law giving automatic approval to rate hikes as high as 10 percent in any one territory. The ability to begin charging rate hikes prior to regulatory approval is suspended until 2009.

Legal power to intervene in insurance rate cases by the state insurance consumer advocate.

Delete a law that non-homestead property owners are evicted from Citizens Property Insurance and must be rejected by unregulated insurers before being allowed back into the state pool. Higher possible assessments against non-homestead property owners are delayed until 2008.

Insurers must return excess profits to consumers - but only after earnings are averaged over as long as 10 years.

What they've decided not to do:

Study whether insurance agents are pocketing an unearned windfall from higher commissions that come as a result of rate hikes.

Adopt tougher Senate language to force large insurers to write both home and auto in Florida .

Create a new program in the Department of Community Affairs to assist communities in disaster recovery.

Expand the state mobile home mitigation program to allow fixtures other than tie-downs.

Require new homes statewide to include internal strengthening features.

Raise cash reserve requirements on Florida insurance companies.