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Legislative session nears, insurance debate heats up

The Florida Legislature will convene next Monday, and media outlets are anxious to get some movement, finally, on Senate Bill 408, the insurance bill. After weeks of hearing the pros and cons of the bill's provisions, it may be a refreshing change to hear open debate about claims payment and sinkhole coverage, among other issues.

Insurance companies are looking at the bill as a "first step" toward a more competitive insurance marketplace in Florida. Policyholders want to know if their premiums will continue to go up. But, as a wise person once said, the public really shouldn't know how sausage or the law is made - it could easily turn out that neither insurers nor insureds will have any questions answered.

The claims payment provision has struck a basic-rights nerve with both companies and advocates. The insurance lobby wants to allow insurers to pay just a portion of a homeowner's property damage claim when the claim is filed. The remainder would be paid when the homeowner entered into a contract and completed the repairs. Insurance companies say it's just not fair that policyholders make a claim and then "just put money in their pocket" or buy a new car. Said one insurance agent, "It's been a huge problem in the state."

Advocates for policyholders say it's none of the insurance company's business what the claimant does with the cash. It's the company's contractual obligation to pay the claim. That's it. If a homeowner wants to live in a house with no roof, it's his or her choice. The disincentive to let repairs go is that property values would go down. But it's the policyholder's choice.

Continued in our next post.

Source: The Daytona Beach News-Journal, "Legislation reforms claims process," Tom Knox, 02/27/11

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