Auto Insurance
Back to Home > Sunday, Apr 30, 2006 News Posted on Sun, Apr. 30, 2006 email this print this
Despite months of negotiations, the House and Senate are still at odds over how to overhaul the storm-tattered property insurance industry and how to tackle the state's no-fault personal injury protection laws.
On the property front, the House gave preliminary approval to a bill last week that aims to attract more competitors to the insurance market and shore up Citizens Property Insurance -- the state-run agency of last resort.
The House wants to use $920 million in sales tax revenue to pay down the estimated $1.7 billion shortfall Citizens racked up last year. Without the relief, all homeowners would foot the full bill, which could amount to a 20 percent surcharge on policies.
To make the market more competitive, the bill proposes giving insurers more leeway to raise rates and bolster the Florida Hurricane Catastrophe Fund, which works as an insurance fund for insurers.
But with premiums already skyrocketing and insurance companies abandoning policies in droves, House sponsor Dennis Ross, R-Lakeland, said that loosening the reins on the industry and mitigating losses at Citizens was the only way to aim for lower premiums in the future.
Last week, the insurance crisis intensified as the state began the takeover of Poe Financial's three troubled companies -- Atlantic Preferred, Florida Preferred and Southern Family. Poe is South Florida's second-largest insurer, and its more than 200,000 policyholders here aren't likely to find coverage from any company other than Citizens, which by law must charge the highest rates in the state.
The severity of the crisis makes legislative compromise a necessity, said William Stander, the assistant vice president of the Property Casualty Insurers Association of America.
''From a consumer perspective, the question is are we going to have insurance available at any price? Or is the state going to be the only game in town?'' he said.
House and Senate leaders were expected to meet over the weekend to work out their differences, but Sen. Rudy Garcia, the Hialeah Republican who chairs the Banking and Insurance Committee, said the vote would probably take place the very last day of the session -- Friday.
In place since 1971, the measure requires motorists to purchase $10,000 worth of no-fault coverage, also known as personal injury protection. Intended to cut down on frivolous lawsuits, insurance companies claim the system is being exploited by fraudsters who stage and fake accidents in collusion with crooked doctors.
While both House and Senate versions of the bill crack down on fraud through stiffer punishments, the House introduced a last-minute amendment last week that makes PIP coverage permanent and contains a list of insurance-friendly provisions.
''This amendment was designed to allow insurance companies to collect premiums and deny claims,'' said Glenn Klausman, a board member of the Academy of Florida Trial Lawyers.
While the insurance industry is backing the House version, the Academy of Trial Lawyers is backing a Senate bill, which it sees as more balanced.
Garcia, who sponsored the bill, said he was eager to talk to his House counterparts about a compromise. If they fail, the no-fault law would expire in 2007.
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Despite months of negotiations, the House and Senate are still at odds over how to overhaul the storm-tattered property insurance industry and how to tackle the state's no-fault personal injury protection laws.
On the property front, the House gave preliminary approval to a bill last week that aims to attract more competitors to the insurance market and shore up Citizens Property Insurance -- the state-run agency of last resort.
The House wants to use $920 million in sales tax revenue to pay down the estimated $1.7 billion shortfall Citizens racked up last year. Without the relief, all homeowners would foot the full bill, which could amount to a 20 percent surcharge on policies.
To make the market more competitive, the bill proposes giving insurers more leeway to raise rates and bolster the Florida Hurricane Catastrophe Fund, which works as an insurance fund for insurers.
But with premiums already skyrocketing and insurance companies abandoning policies in droves, House sponsor Dennis Ross, R-Lakeland, said that loosening the reins on the industry and mitigating losses at Citizens was the only way to aim for lower premiums in the future.
Last week, the insurance crisis intensified as the state began the takeover of Poe Financial's three troubled companies -- Atlantic Preferred, Florida Preferred and Southern Family. Poe is South Florida's second-largest insurer, and its more than 200,000 policyholders here aren't likely to find coverage from any company other than Citizens, which by law must charge the highest rates in the state.
The severity of the crisis makes legislative compromise a necessity, said William Stander, the assistant vice president of the Property Casualty Insurers Association of America.
''From a consumer perspective, the question is are we going to have insurance available at any price? Or is the state going to be the only game in town?'' he said.
House and Senate leaders were expected to meet over the weekend to work out their differences, but Sen. Rudy Garcia, the Hialeah Republican who chairs the Banking and Insurance Committee, said the vote would probably take place the very last day of the session -- Friday.
In place since 1971, the measure requires motorists to purchase $10,000 worth of no-fault coverage, also known as personal injury protection. Intended to cut down on frivolous lawsuits, insurance companies claim the system is being exploited by fraudsters who stage and fake accidents in collusion with crooked doctors.
While both House and Senate versions of the bill crack down on fraud through stiffer punishments, the House introduced a last-minute amendment last week that makes PIP coverage permanent and contains a list of insurance-friendly provisions.
''This amendment was designed to allow insurance companies to collect premiums and deny claims,'' said Glenn Klausman, a board member of the Academy of Florida Trial Lawyers.
While the insurance industry is backing the House version, the Academy of Trial Lawyers is backing a Senate bill, which it sees as more balanced.
Garcia, who sponsored the bill, said he was eager to talk to his House counterparts about a compromise. If they fail, the no-fault law would expire in 2007.
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