New laws require policy education

[Aquawind]

New laws require policy education

Just-passed bills say insurers must clearly list deductible information

By Joan D. LaGuardia
jlaguardia@news-press.com
Published by news-press.com on May 16, 2005


Insured homeowners will benefit from new laws passed on the last day of Florida's recent legislative session.

Some local consumers, however, wonder if the new legislation gives consumers added protection and value.

Generally, the new laws require insurers to improve consumer education about their policies, especially about additional options.

For example, insurers who offer deductibles of 2 percent, 5 percent and 10 percent on damage from a named storm must now explain the difference between a regular deductible and the higher storm deductibles.

Insurers must clearly list the dollar amount of the deductible options and how each affects premiums and policy renewal.

Nelson Stephenson, 35, of Naples, approves of insurers more clearly explaining deductible options and outcomes.

"We're at the mercy of the big insurance companies and their lobbyists in Tallahasee," Stephenson said. He is now shopping for a new policy, and said information about storm deductibles is not volunteered by insurers.

"On some of the quotes I've been getting, they don't even show the hurricane deductible," he said. "None of them are being upfront."

The new legislation also mandates a checklist near the front of the policy so consumers can quickly see what their policy does and does not cover.

Sam Miller, spokesman for the Florida Insurance Council, said many consumers did not realize there were gaps in their coverage until they had hurricane damage.

For example, insurers must now explain that replacement value might not include the cost of bringing damaged property up to existing building codes. Insurers must also provide information about discounts that result from damage-prevention efforts.

"It's nice that they say, 'Here's what you have to do to get a discount,' but I think it's still going to be hard to get those discounts," said John Honingford of Cape Coral. His attempts to qualify for discounts have mostly been unsuccessful, he said.

"I've had inspectors out here from the insurance industry, and they will only give you discounts for the highest quality devices and materials," he said.

Standard items purchased at local building supply stores, he said, often do not qualify.

Tom Gallagher, Florida's chief financial officer, however, praised the benefits to consumers.

"Following last year's devastating hurricanes, there was a clear demand from storm victims for simpler insurance policies that would allow Floridians to better understand what they are buying," Gallagher said

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