The Florida Insurance FACT Book is the result of years of pertinent data accumulated by the Florida Insurance Council. It is a one-of-a-kind, constantly evolving, Florida-specific resource that includes important material compiled from Florida Insurance Council, along with data assembled from other Internet sites, including state agencies, the Florida Legislature and important national sources.

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Florida Guaranty Funds & Associations

July 12, 2007

Much of this information came from the Department of Financial Services Internet Site.

Florida Insurance Guaranty Association (you are leaving the FIC site and opening a new browser window)

The Florida Insurance Guaranty Association handles the claims of insolvent property and casualty insurance companies.

Florida Workers' Compensation Insurance Guaranty Association (you are leaving the FIC website and opening a new browser window)

The purpose of the Florida Workers' Compensation Guaranty Association, Inc. ("FWCIGA") is to implement Florida Statute Sections 631.902 - 631.927, to provide a mechanism for the payment of covered claims, to avoid excessive delay in payment and to avoid financial loss to claimants in the event of the insolvency of a member insurer.

Florida Life and Health Insurance Guaranty Association (you are leaving the FIC website and opening a new browser window)

Florida Health Maintenance Organization Consumer Assistance Plan
(Note: This organization does not currently have a website but may be contacted using the below contact information)
Phone: 850-893-6686
Fax: 850-422-3737
Mailing Address
P. O. Box 16459
Tallahassee, FL 32317-6459

Floridians can learn more about the My Safe Florida Home program and how they can harden their homes by visiting

My Safe Florida Home

March 8, 2007

Florida Department of Financial Services Press Office

TALLAHASSEE-On the first day of the 2007 legislative session, the Windstorm Mitigation Study Committee published its final report analyzing mitigation efforts in Florida, including the My Safe Florida Home program, and detailing recommendations for future efforts to harden homes in Florida.

The final report can be found at Windstorm Mitigation Study Committee Internet Site

The committee was created as a result of House Bill 1A, passed by the Florida Legislature during Special Session. The committee was charged with analyzing short- and long-term solutions and programs that address the need to immediately and effectively harden homes in Florida. Copies of the report were delivered Tuesday to the Governor, Chief Financial Officer, Senate President, Speaker of the House and Insurance Commissioner.

Specifically, the committee cited three reasons for the importance of mitigation in Florida: (1) mitigation helps reduce property losses from catastrophic storms; (2) homeowners are less likely to be charged assessments for catastrophic damage if losses are minimized; and (3) homes and businesses that are hardened are eligible for savings on their wind insurance premiums.

The committee's recommendations fell into several categories, including: improving the My Safe Florida Home program, considering new approaches to advance mitigation, implementing insurance and construction reforms to encourage "code-plus" development, providing incentives to encourage home- hardening efforts by homeowners, identifying potential funding, educating and engaging the public about the importance of mitigation, and supporting research.

Floridians can learn more about the My Safe Florida Home program and how they can harden their homes by visiting http://www.mysafefloridahome.com/.

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Municipal Accident Response Fees: Overview

From the Insurance Information Institute, New York, October 2006

Insurance Information Institute

Budget-constrained municipalities seek alternative revenue-generating streams. A number of them are attempting to pass on the cost of certain auto accident response services to insurers.(1)

Recent reports suggest that municipalities in many Midwestern states, including Florida, Illinois, Indiana, Iowa, Michigan, Missouri, Ohio, and Wisconsin, are now billing insurance companies for police or fire department responses to auto accidents. In some cases, third party fee companies are encouraging the practice by soliciting municipalities for the collection of accident response fees.

In a related move, a number of other states including Florida, Texas and some New England states are now attempting to charge accident response service fees to an at-fault driver’s insurance company. Some have developed a tiering system whereby different fees would be charged to an insurer based upon whether the driver involved in the accident is a non-resident or resident in that particular state.(2)

The growing trend of municipalities of hitting insurers with the bill for accident response fees is an emerging issue that has direct consequences for insurers and their policyholders.
 What Are Municipal Fees?

Historically, municipalities across the U.S. have charged fees to community residents based upon certain services provided. Examples of long-standing municipal fees include: building and licensing fees, and administrative fees for sewer and trash collection.

Typically the user of the service pays the fee. This funding mechanism enables communities to raise additional revenue without increasing property or personal taxes.

In recent months some municipalities have been charging a new kind of fee. These fees are designed to recoup the cost of auto accident response services provided by police and fire departments (see below).
 What Are Accident Response Fees?

According to reports, municipalities in approximately 13 states have begun the practice of billing insurance companies for various accident response services. Fees vary from jurisdiction to jurisdiction. Various sources indicate that municipalities charge anywhere from $100 to $300 per police or fire department run.(3)

Ordinances in a number of cities and municipalities allow for the collection of such fees. The exact number of state divisions that have passed or are proposing to implement such ordinances is difficult to monitor, but the trend appears to be concentrated in the Midwest.

Some municipalities offer the rationale that insurers should pay these fees because accident reports are prepared solely for their benefit. But this does not appear to be factually correct.

Accident reports are primarily provided to assist crash victims in case of legal action.(4) The reports are also used by state and local law enforcement for statistical reporting requirements and by hospitals that provide medical assistance to injured accident victims. Other key beneficiaries of crash reports include personal injury attorneys and chiropractors.

Clearly if such fees are to be passed on to insurers, the cost should be distributed equally among all these parties.

Proponents of accident response fees also often assert that charging insurers will have no impact on rates. This assertion is false. If insurers are obliged to pay more, premiums will have to rise to compensate for the higher costs. As such, municipalities will have in effect imposed a “hidden tax” on their residents.
 The Impact on Auto Insurance

The response to and investigation of auto accidents has long been handled by police and fire departments, supported by local taxes. Such response services have never been covered or charged for in auto insurance policies. While auto insurance policies typically cover medical expenses, including ambulance transportation, expenses related to accident response are not covered.

The medical payments portion of standard personal auto policies states only(5): We will pay reasonable expenses incurred for necessary medical and funeral services because of “bodily injury”: Caused by accident; and Sustained by an “insured”We will pay only those expenses incurred for services rendered within 3 years from the date of the accident.
No-fault auto insurance, also known as personal injury protection (PIP) coverage also has provision for the payment of benefits for medical expenses.

No-fault insurance basically covers auto accident victims on a first-party (policyholder) basis, allowing them to collect damages from their own insurers regardless of who was at fault. Today, many states have some type of no-fault auto insurance law, with restrictions on the right to sue.

A standard PIP policy would pay out for medical expenses, usually up to a stated maximum limit, and for funeral expenses up to a certain limit. While ambulance services typically are covered  under this portion of auto insurance policies, no other accident response fees are listed.

Clearly, if insurers were to start providing coverage for additional accident response services,  including police and fire, the cost of auto insurance would be likely to increase.

Another key point to consider is that municipalities do not have payment provisions for drivers  who do not carry insurance to pay for the services. As such, responsible drivers carrying auto insurance are being unfairly penalized—in effect double-taxed—by this attempt to pass on accident response costs to their insurers.

  The Influence of Collection Fee Companies

While accident response fees can appear an attractive alternative to raising local taxes for budget-constrained municipalities, third party vendors are playing a growing role by encouraging this practice. Various reports suggest that some collection companies may be engaging in questionable tactics, such as helping draft the city ordinances that authorize them, inflating charges for accident response services, employing aggressive methods to force insurers to pay the fees, or even seeking payment directly from policyholders in the event that their insurer refuses to pay the fees.

Another common misconception about collection companies is that there is no charge to cities for their services. However, it is important to recognize that while collection companies do not charge a city directly for their services, they do take a percentage of the fees collected up front. A typical fee percentage is around 10 percent of what they collect on behalf of municipalities.

The move by some municipalities to bill insurers for auto accident response fees is a growing trend that has direct implications for insurers and their policyholders. If insurers are to be expected to pay for services historically supported by local taxes, going forward they will be forced to factor this additional cost component into their auto insurance policies. In other words, auto insurance rates will need to rise in order to account for the higher costs faced by insurers.

The likely outcome of this inequitable system is a form of double-taxation whereby community  residents via higher insurance premiums are forced to pay for a service already covered through their taxes.(6)

For further information, see:


NAMIC: Accident Response Fees

(1) Ominous Trend: Growth of Municipal Accident Response Fees, National Association of Mutual

Insurance Companies (NAMIC), April 2006.
(2) Orlando Sentinel (Florida), January 11, 2005, Winter Park Studies Crash Fees; and April 12,

2005, Accidents Will Cost More.
(3) Ominous Trend: Growth of Municipal Accident Response Fees, National Association of Mutual

Insurance Companies (NAMIC), April 2006.
(4) Ohio Insurance Institute (OII), http://www.accidentresponsefees.org/
(5) The Insurance Professionals’ Policy Kit, Alliance of American Insurers, 2004 edition.
(6) Ominous Trend: Growth of Municipal Accident Response Fees, National Association of Mutual Insurance Companies (NAMIC), April 2006.

Miami Herald Survey of Florida Communities Considering Accident Response Fees
From a July 9 report in the Miami Herald

Roughly 4,000 times a year -- or about 11 times per day -- Davie's police and fire departments respond to car crashes on interstates and state roads within the town's borders. If someone is hurt, the fire department has to send at least six firefighters with two emergency vehicles, spending at least half an hour and $500 per crash, Davie Fire Chief Don DiPetrillo said.

Recently, Davie became one of a growing number of cities that want to recover those costs by charging the drivers who get into accidents on their roads. Although Davie Town Council members voted against the idea, many other cities have adopted such fees, or are considering them as a way to bolster local budgets that are being squeezed by state-mandated spending cuts.

Despite warnings from auto insurance companies that the fees could drive up the cost of premiums, a host of cities around the state began looking more closely at them when the Florida Legislature debated tax-reform plans earlier this year, said Regina Moore, president of the Ohio-based Cost Recovery Corp., which has about a dozen clients and is one of several national companies that handles the crash-related collections.

''I would say the the phone calls that I'm receiving now have tripled,'' she said.

More than two dozen cities already have enlisted contractors to recover fire-rescue costs from insurance companies and drivers, including Belleview, Chiefland and Live Oak in north-central Florida and a cluster of cities in the Panhandle. In North Miami Beach, commissioners are looking at a plan that would charge insurance companies upward of $200 when drivers get into accidents on city roads.


OIR Commissioner McCarty Hails DOAH Ruling on Credit Scoring

We respectfully submit that OIR has misinterpreted the state Division of Hearing Officer ruling, filed in a challenge by the Florida Insurance  Council and national insurance trades, as a "win." The hearing officer accepted insurance community arguments and struck down the rule, forcing OIR to start over. We also believe the Office is misinterpreting the U.S. Supreme Court decision and urge consumers and the media to read the opinion through the link below. We are offering this report and others to note OIR's strong opposition to credit scoring and are attempting to present a balanced FACTBook chapter on this issue.

Sam Miller, Florida Insurance Council  

TALLAHASSEE (1/4/2007) - Florida Insurance Commissioner Kevin McCarty, today, welcomed a decision by the Division of Administrative Hearings regarding a challenge to the credit scoring rule promulgated by the Office of Insurance Regulation (Office).  The rule was filed in March of 2005 and approved by Gov. Bush and the Florida Cabinet.  It implements section 626.9741 F.S. which was passed by the Legislature and signed into law in June of 2003.
The rule does not prohibit the use of credit scores but requires information be submitted regarding how the information will be utilized and to show that it will not have a disparate impact on persons of any race, color, religion, marital status, age, gender,  income, or national origin.   Various insurance industry trade groups challenged the Office's authority to implement the rule, calling it an invalid exercise of delegated legislative authority.  While the Administrative Law Judge took issue with the failure of the rule to define the terms "race, color, national origin", and that it failed to clearly define the term "disparate impact", he approved the underlying authority and approach taken by the rule.
"After reviewing the decision I am pleased that the Administrative Law Judge agreed that the Governor and Cabinet do have the authority to prohibit the use of credit scoring if it unfairly discriminates," said McCarty, "and that he disagreed with the claim of the petitioners that we did not have the authority to define unfair discrimination in anything other than actuarial terms.  While he felt that the definition used was too vague, he clearly found that the Governor and Cabinet had the authority to define 'unfair discrimination' as it relates to the use of credit scoring in terms of having a disproportionate impact on certain protected classes if the definition was less vague."
The industry petitioners also argued that the information necessary to comply with the order was not at their disposal or that it would be impossible to gather the information.  McCarty applauded the judge's opinion that that argument is invalid.
"We respectfully disagree with the judge's deeming of the definition unfairly discriminatory as vague and not adequately defined in the rule.  However, he has made certain suggestions in this regard which we will review and may incorporate into the rule," said McCarty.  "This guidance by the judge may also be useful in an appeal of other issues regarding the challenge to the rule that we believe need to be remedied."
One public study on credit scoring found that one in four credit reports contains errors or omissions serious enough to disqualify consumers from purchasing a home, a car or getting a job.  And, in recent years, a national insurance company paid a multi-million dollar fine to settle state charges that it used negative credit information to deny or discourage applicants from obtaining automobile coverage. 
In addition to the new rule requiring all insurers to show the use of credit information does not cause any disparate impact, the filings must also include a complete description of the methodology utilized when using credit information.
Further, they must contain data showing what impact having little or no credit history would have on policyholders and also certification that the insurer will correct any errors in premiums charged to Floridians. 
The rule requires compliance with the Fair Credit Reporting Act, it mandates a biannual review of credit information when requested by the insured and the rule requires insurers to establish procedures for appeal by applicants whose credit was negatively impacted by divorce, death of a spouse or temporary unemployment.
The Informational Memorandum sent to all affected insurance companies regarding the rule can be viewed at 

DOAH Ruling on Credit Scoring

Commissioner Hails Supreme Court Decision on Credit Scoring

We respectfully submit that OIR has misinterpreted the state Division of Hearing Officer ruling, filed in a challenge by the Florida Insurance  Council and national insurance trades, as a "win." The hearing officer accepted insurance community arguments and struck down the rule, forcing OIR to start over. We also believe the Office is misinterpreting the U.S. Supreme Court decision and urge consumers and the media to read the opinion through the link below. We are offering this report and others to note OIR's strong opposition to credit scoring and are attempting to present a balanced FACTBook chapter on this issue.

Sam Miller, Florida Insurance Council  

TALLAHASSEE (06/12/2007) - Florida Insurance Commissioner Kevin McCarty hailed the United States Supreme Court's recent ruling on insurers' use of credit scoring.  The litigation involved two national auto insurers, Safeco Insurance Company of America, and GEICO General Insurance Company.  The case alleged that insurers used credit reports and took "adverse action" on policyholders without giving proper notice.

The Supreme Court, while finding that one of the insurers may have violated the Fair Credit Reporting Act, found that damages were inappropriate based on the facts of the case.  However, in writing for the Court, Justice David Souter asserted that insurers can be held liable for damages and penalties under the Fair Credit Reporting Act for failing to notify applicants if their rates are higher than would have been obtained based on a "neutral" credit report even if the higher rate imposed is at the inception of the policy.  

"This is a very important decision," announced Commissioner Kevin McCarty, "This will assist in Florida's efforts to limit insurers' use of credit scoring, and ensure full disclosure of how credit reports are being used."

Florida has been a leader on this issue and passed credit scoring legislation in 2003.  When a rule was adopted by the Florida Office of Insurance Regulation (Office) to enforce this legislation in 2005, after extensive public input, industry trade groups challenged its implementation.  In January, 2007, an administrative law judge ruled in favor of the Office on the substance of the disputed points, although he noted some vagueness in defining the terms "disparate impact" and "race, color and national origin."  The Office revised the rule to address the judge's concerns, and presented the revised rule to the Financial Services Commission during its June 12, 2007 meeting.

While the U.S. Supreme Court's decision was limited to the notification issue, Florida's efforts have been aimed at ensuring that insurers' use of credit reports does not negatively impact consumers based on race, religion, ethnicity, national origin, marital status, income-level, or place of residence.  Florida also will require insurers to supply all the information they used to develop any credit "models" and will make sure "models" are valid and do not unfairly discriminate.

"The ruling was a great first step," said Commissioner McCarty, "but we will not stop pursuing this matter until we are sure disadvantaged minorities in Florida are not being harmed by this practice."

For a copy of the U.S. Supreme Court's ruling please click the following link: 

U.S. Supreme Court on Credit Scoring

From the American Insurance Association; prepared for distribution to consumers

Credit-based Insurance Scores: What you need to know

Have you ever applied for a car loan, a mortgage, or a credit card? If so, you know that the way you have managed your credit in the past is very important. The information contained in your credit report can have a major influence over many parts your life, including your car and homeowners insurance.

Many insurance companies use a credit-based “insurance score” when evaluating insurance applications or policies. This brochure was designed to give specific answers to questions about insurance scoring, including how and why it is used.

What is a credit-based insurance score? Why do insurance companies use them?

An insurance score uses information from your credit report to predict the likelihood credit says a lot about how responsible you are. Insurance companies want to reward responsible people by offering them better insurance products and by charging them lower rates. That’s why insurance scores are so useful.

It is important to understand that an insurance score is not the same thing as a credit score. Both are derived from the information found in your credit report, but they predict very different things. A credit score predicts how likely you are to repay a loan or other credit obligation. When you are applying for a loan or some other form of credit, the bank will consider your credit history as well as other factors in determining whether you are likely to repay your debt. While banks and other lenders will look at your income when making decisions, insurers do not.

What does my credit history have to do with how I drive my car?

Having a good insurance score does not necessarily mean you are a good driver or a more responsible homeowner. However, research has shown that consumers with better insurance scores generally file fewer claims and have lower insurance losses.

That is not to say that all people with low insurance scores are higher risks. For instance, if you add a 16- or 17-year-old driver to your auto insurance policy, your premiums will very likely increase. This is because as a group, younger drivers have more claims and losses than those with more experience. That does not mean that all 17-year-olds are bad drivers. Research shows, though, that drivers in that age group are more likely to have losses, so they pay more in premiums. It’s the same thing with insurance scores – research shows that people with certain patterns of behavior in their credit history are more likely to result in losses for the insurance company. As a result, they pay higher premiums, or, in extreme cases, they might have trouble getting insurance from some companies.

How is my credit-based insurance score calculated?

When you apply for insurance, the insurance company orders credit information from one or more of the three major U.S. credit bureaus. This information is entered into a computer program that generates an insurance score. Most of these programs, or “models,” look at things like payment history, collections, credit utilization and bankruptcies. For example, if you have never been late paying your mortgage, you will probably have a better score than a person who pays late. If you have “maxed out” credit cards, that will negatively affect your score. When you apply for coverage and your insurance company orders your score, the credit bureau will make a note in your file that the insurance company looked at the record.

What kinds of things affect my insurance score?

Insurance scores are based on information like payment history, bankruptcies, collections, outstanding debt and length of credit history.  For example, regular, on-time credit card and house payments affect a score positively, while late payments affect a score negatively.

Any time someone looks at your credit report, the credit bureaus record this activity – they refer to it as an “inquiry.” The number of inquiries on your record can also affect your insurance score. There are several types of inquiries, but under the models used by most insurance companies, the only inquiries that affect your insurance score are those you initiate. Every time you apply for credit, whether a department store charge card, a new car loan, or “easy financing” on new bedroom furniture, an inquiry is noted on your record. Applying for a lot of credit in a short time shows that you might be taking on more than you can handle.

One way to improve your insurance score is to limit the number of self-initiated inquiries in your credit report. This can be done by only applying for credit when you really need it. For example, an unsolicited “pre-approved” credit card notice in the mail would not affect your score, because you did not initiate the offer. If you fill out the form and send it back, though, you are applying for new credit. An inquiry will then be posted in your credit history, which may have an effect on your score.