Hurricane insurance plans by major governor candidates

TALLAHASSEE, Fla. -- Aug. 31, 2006 -- Following is a look at major property insurance proposals by the four major candidates for Florida's next governor.

Republican candidates, Tom Gallagher and Charlie Crist:

Gallagher

* Would allow insurance companies to more quickly tap into the state Catastrophe Fund, a backup account that bails them out when they have big losses. Currently, they can dip into the fund once they've paid $5.3 billion in claims. Gallagher has proposed lowering that threshold to $3 billion, thus making more companies able to afford to write policies in Florida.

* Calls for the creation of individual tax-free catastrophe savings accounts to help homeowners save for items like deductibles and uninsured losses

* Would encourage insurance companies to create tax-deferred catastrophe reserve funds to help limit their reliance on reinsurance.

* Gallagher has also pushed hard for a state program that provides grants for people to hurricane-proof their homes, and was among those who called for using a surplus in tax dollars earlier this year to offset a deficit at Citizens Property Insurance, thus preventing Florida homeowners from getting socked with a huge assessment.

* Supports a national catastrophe fund.

* Calls for capping Citizens' residential policies at $1 million, which would reduce its exposure by $810 million.

Crist

* Would push legislation to require companies that offer other types of insurance, for example, auto policies, to also sell homeowners.

* Would require insurance companies to offer home inspections so homeowners can know what can be done to make their houses more storm-proof, and push for more state money for grants to homeowners to make improvements.

* Would require insurers to give discounts for improvements made.

* Proposes requiring the state's insurance consumer advocate to publish an annual report card that analyzes the claims handling, consumer complaints, profit margins, and financial health of every insurance company, and giving each company a letter grade.

* Has suggested that the state should find a way to make national insurance companies stand behind their Florida subsidiaries more. Crist has complained that Florida subsidiaries often have losses while their national parent companies have large profits.

* Would require insurance companies to quickly cut a separate check to a homeowner for living expenses rather than including it with the repair check.

* Supports the creation of a national catastrophe fund.

* Supports the task force created by Gov. Jeb Bush to come up with solutions to insurance problems, and pledges to consider their recommendations.

* Supports lowering the threshold for companies to tap into the Hurricane Catastrophe Fund to $3.2 billion.

Democrat candidates Jim Davis and Rod Smith:

Davis

* Wants to repeal a law passed by the Legislature that clarified that windstorm insurance policies don't have to cover damage caused by water in a hurricane. Davis calls it a loophole that allows companies the freedom to deny more claims. Others argue that the national flood insurance program is supposed to cover water damage, not wind insurers.

* Would require insurance companies to give one year's notice before dropping policyholders who have paid their premiums for three consecutive years and not filed any claims.

* Would create a ''Policyholder Advocate General'' in the governor's office to advocate for consumers in rate decisions.

* Calls for a full annual audit of Citizens Property Insurance's administrative, ethical and actuarial policies. Davis also proposes adding a specific policyholder representative to Citizens' Board of Governors.

* Says he would veto any attempt to use money in the Catastrophe Fund for other purposes.

* Favors a national catastrophe fund.

* Would broaden programs to provide help to homeowners for hurricane proofing of houses.

Smith

* Smith proposes flipping the model for when the state bails out insurers, putting government in the position of covering front-end losses rather than on the back end.

* Smith proposes that the state provide base windstorm coverage to cover the first $50,000 to $100,000 of losses, which would be covered by premiums. The state would use private insurance companies to actually manage the policies, much like the federal flood insurance program. Private insurance companies would then sell policies to cover damage above what the state will cover. Currently, private insurance covers losses, and when it can't, the state backs up the companies through the Catastrophe Fund.

* Proposes to dedicate 40 percent of extra sales tax collected as the result of storm-related repair, replacement, or rebuilding, to state-backed Citizens Property Insurance Co. to keep it from having deficits that all Florida homeowners would otherwise have to back up through assessments on their policy. Smith proposes dedicating another 40 percent of the excess tax revenue Hurricane Catastrophe Fund.

* Would create regulatory commission similar to the Public Service Commission to evaluate insurance rate requests and an independent ''public counsel'' to argue on behalf of consumers before the commission.

On the Net:

Crist: http://www.charliecrist.com/docs/HomeownersInsurance.pdf

Smith: http://rodsmith2006.com/pages/on_the_issues/hurricane

Gallagher: http://www.tg2006.com/Pages/About/PolicyDetails.aspx?is_id9

Davis: http://www.jimdavis2006.com/