Board defers hurricane reimbursement
By BRENT KALLESTAD – Associated Press
TALLAHASSEE — Florida Gov. Charlie Crist said Wednesday he needs some answers before giving the OK to pay $710 million in late-filed or renewed insurance claims from Hurricane Wilma in 2005.
Crist and two members of the independently elected Cabinet, sitting as the State Board of Administration, deferred on a request by the Florida Hurricane Catastrophe Fund Finance Corporation to sell bonds not exceeding $710 million to reimburse insurance companies for claims they’ve paid to policyholders.
“A lot of these claims, perhaps, may not be legitimate,” Crist said. “I’m skeptical.”
When the decision is made to go ahead with the reimbursement from proceeds from the bonds, any Florida resident or business owner with insurance on their car or property will be assessed on average an additional $18 per household, SBA executive director Ash Williams said.
The Cat Fund surcharge applies to all homeowners and commercial policies and all motor vehicle insurance policies and no politician is likely to favor increased insurance costs in an election year.
The three SBA trustees — Crist, Chief Financial Officer Alex Sink and Attorney General Bill McCollum — are seeking new jobs. Crist is running for the U.S. Senate while Sink and McCollum are vying to replace him.
An industry group, the Florida Insurance Council, applauded the board’s decision Wednesday and endorsed legislation (HB 1181, SB 2264) filed by Rep. Janet Long, D-St. Petersburg, and Sen. Mike Bennett, R-Bradenton, to require hurricane claims be filed within three years of landfall instead of five years as it is now.
“We share concerns of SBA members that many of the more recent Wilma claims are illegitimate and involve inappropriate activities by public adjusters,” FIC President Guy Marvin said.
The number of public adjusters exploded after a string of damaging hurricanes belted Florida in 2004 and 2005, culminated by the late October landfall by Wilma. Unlike salaried insurance company adjusters, public adjusters work most often on a commission based on the settlement with an insurer.
“To have that kind of explosion, and a second bite of the apple if you will at these kinds of claims that would be borne on the back of good citizens that are just paying their insurance routinely as they are supposed to do would be inappropriate,” Crist said.
The settlements from claims on Wilma damage contrast sharply with Hurricane Andrew, the most expensive hurricane in insured losses in Florida history. About 90 percent of all Andrew claims were received within six months of landfall in August 1992 and virtually all were processed within a year.