Property Insurance: General

From Senate Banking & Insurance Committee, Status of the Cat Fund, October 2008

The Legislature mandated that the savings insurers realize through purchasing expanded FHCF coverage created by ch. 2007-1, L.O.F., be reflected in rate filings so that the benefits of the fund’s expansion would be passed on to policyholders. To that end, the legislation required the Office of Insurance Regulation (OIR) to determine a presumed savings factor that would be applied to every policy renewed on or after June 1, 2007 by an insurer that purchased expanded FHCF coverage. Each insurer was required to make a rate filing that took the presumed factor into account. In the tables below, the column “proposed presumed factor” refers to the increase or decrease in rate the insurer filed for while taking into account the presumed factor; the column “final presumed factor” is the increase or decrease that the OIR approved.

Because many insurers had not finalized their reinsurance purchases for the 2007 hurricane season at the time they were required to submit the presumed factor filing, the OIR permitted insurers to make a “true-up” rate filing that was designed to take into account all the savings created by ch. 2007-1, L.O.F., and also the actual cost of the final reinsurance treaties that the various insurers had negotiated. The filing was due no later than October 1, 2007, and, if approved, was effective on all new or renewed policies entered into 90 days after that date (essentially after year’s end). The charts’ “proposed true-up filing” columns signify the rate increase or decrease the insurer requested at this filing, while the “final true-up filing” columns provide the increase or decrease the OIR approved. Not all true-up filings have been approved, so the status of the insurer’s true-up filing is found at the far right of each chart. Any additional rate decreases due to mitigation credits are reflected in the “mitigation discounts” column. The total percentage rate reduction stemming from the 2007 legislation is found in the “total rate change” column. All figures in the columns were provided by the Office of Insurance Regulation.

Rate Filings Made by Insurers to Reflect Savings from the Expanded FHCF Coverage

Senate Banking &  Insurance Committee review of financial status of Florida Hurricane Catastrophe Fund, including implementation of optional upper level coverage and current bonding and capacity shortfall.

Senate B&I: Status of Cat Fund, October 2008

Click here for the paper: AIA Insurance Subsidy Paper

From the Florida Insurance Counciland the Department of Financial Services' Bureau of Licensing

Tens of thousands of adjusters will work in Florida following a major hurricane, including resident adjusters who live in the state year-round and thousands more coming in under the Department of Financial Services’ Emergency Adjuster Licensing  System. Adjusters may be full-time employees of an insurance company or they may be under contract with independent adjusting companies who, in turn, contract with private insurers and Citizens Property Insurance Corporation. Independent adjusting companies have become a very significant presence in the post-hurricane claims process.

Public adjusters can also be brought into the development of hurricane claims, under contract with the policyholder, not the insurer. They assist the insured in developing his or her claim and will be paid by the policyholder out of the final insurance settlement amount. The Department of Financial Services does not issue emergency public adjuster licenses.  Public adjusters contracting with policyholders to adjust disaster related claims must hold a permanent resident or nonresident public adjuster license.

The Department’s Bureau of Licensing issued 17,488 Emergency Adjuster licenses for the four-storm 2004 hurricane season and 12,284 Emergency Adjuster licenses during 2005. Florida was again impacted by four hurricanes that year, but most of the damage was from Hurricane Wilma. In addition to adjusters working with emergency licenses, hundreds, if not thousands, of resident adjusters handled claims from the 2004/2005 hurricanes.

Resident and Non-resident Permanent Licenses are Available from DFS’s Bureau of Licensing

There are several categories of adjusters in Florida and each must be licensed by the State of Florida and DFS. This is a permanent adjuster license as opposed to a temporary emergency adjuster license. It is available to Florida residents and non-residents. Many adjusters who come into the state following a hurricane or other catastrophe will operate under a non-resident adjuster’s license.

According to DFS’s Bureau of Licensing, “Florida offers Resident and Non-resident adjuster licenses broken down by Company, Independent and Public adjusters.  Within those three categories the majority of the licensees hold All Lines or Property and Casualty Adjuster licenses.  However, there are more limited types of adjuster licenses such as Motor Vehicle Physical Breakdown and Mechanical Breakdown, Worker's Compensation, and Health.”

Here are statistics on current resident and non-resident adjuster licenses, as of July, 2008, provided by the Bureau of  Licensing:

Resident Adjusters:
Independent All Lines Adjusters:  13,821
Independent Property/Casualty Adjusters:  415
Company All Lines Adjusters:  14,697
Company Property/Casualty Adjusters:  322
Public All Lines Adjusters:  2,219
Public Property/Casualty Adjusters:  130

Nonresident Adjusters:
Independent All Lines Adjusters:  4,330
Independent Property/Casualty Adjusters:  5,561
Company All Lines Adjusters:  10,213
Company Property/Casualty Adjusters:  13,559
Public All Lines Adjusters:  170
Public Property/Casualty Adjusters:  227

Emergency Adjuster Licensing System

Florida offers emergency adjuster licensing, which is probably the primary license utilized by hurricane adjusters who will  work in a catastrophe here but actually live in another state. This is a temporary license initially good for six months. DFS will extend the duration following a major hurricane or series of hurricanes. In 2004, following four significant hurricanes, DFS extended emergency adjuster licenses once for a second six-months. After that adjusters had to have either a resident or non-resident license.

DFS activates its Emergency Adjuster Licensing System when insurers demonstrate that their claims volume exceed their ability to handle claims through resident or non-resident adjusters. Following a major hurricane, DFS may activate emergency adjuster licensing for all carriers. For more limited events like the Villages Tornadoes early this year, emergency adjuster licenses may be issued on a company by company basis. Companies had to demonstrate they needed to bring in outside adjusters, in addition to non-resident licensed adjusters who might be available, to handle their central Florida tornado claims. Several carriers did receive emergency adjuster licenses for the tornadoes, but not the industry as a whole. DFS reports that it issued 61 Emergency Adjuster licenses following the tornadoes.

From DFS’s Bureau of Licensing: “The Emergency Adjuster application may be activated once a catastrophe has impacted the state of Florida.  It is typically not activated in advance of a potential disaster or in advance of hurricane season.  The application is posted only when a disaster has actually impacted the state of Florida.  The department allows appointing entities (insurance companies, independent adjusting companies, independent adjuster or general lines agents) to submit applications for Emergency Adjuster licenses in accordance with 69B-220.001 of the Florida Administrative Code. 

"Here is the standard established in  69B-220.001 for emergency adjuster licensing:

“'For purposes of Section 626.874, Florida Statutes, an emergency exists when, due to a specific, infrequent, and sudden natural or manmade disaster or phenomenon, there have arisen losses to property in Florida that are covered by insurance, and the losses are so numerous and severe that resolution of claims related to such covered property losses will not occur expeditiously without the licensing of emergency adjusters due to the magnitude of the catastrophic damage.

“…A failure of claims to be resolved expeditiously shall exist upon an insurer's filing with the department a written  statement that one of the following conditions exists:

a. The insurer expects to incur at least 500 claims as a result of the event; or
b. The magnitude of the event is expected to generate twice the mean number of claims for one month for the affected area.”

Independent Adjusting Companies Now Handle Significant Portion of Claims Processing

As noted above, independent adjusting companies have become a very significant player in processing claims following a major hurricane. Citizens Property Insurance Corporation, Florida’s largest hurricane insurer with 1.3 million policies, has 50 claims supervisors who are full-time employees and then 6,000 adjusters on contract through adjusting companies. Some large insurers still operate national catastrophe teams, but more and more insurers – of all sizes – have begun to contract with and count on independent adjusting companies following a major catastrophic event.

Adjusting Firms are not licensed by the state, but every adjuster retained by an adjusting company must be licensed and appointed.

Public Adjusters – As a hurricane victim, do you need them?

DFS reports that about 2,800 public adjusters have a regular license in Florida. Here is the breakdown:

Resident: 2,366
Non-resident: 397

Public adjusters are not paid by insurance companies as are company adjusters and independent adjusters, but will receive a percentage of the final settlement from the insurance company. The public adjusting community, including the Florida Association of Public Adjusters, sees this as an important benefit for consumers, contending public adjusters will be more objective and look out for the interests of the hurricane victim and not the insurance company.

Private insurers, the Florida Insurance Council and Department of Financial Services acknowledge there may be a need for a public adjuster in some hurricane claims, but caution consumers and emphasize that the adjuster’s fee is coming out of their settlement; insurers do not pay public adjuster fees as they pay attorney’s fees in successful lawsuits by policyholders. In addition, the private insurance community points out, Department of Financial Services mediation, at no cost to the policyholder, is available in disputes between hurricane victims and their insurance companies, an option that could be exercised before contracting with a public adjuster. However, policies issued through the National Flood Insurance Program are exempt from the mediation program.

The unlicensed practice of Public Adjusting is a third degree felony.  Public Adjusters should have a license issued by the Department of Financial Services in their possession. Florida Administrative Code 69B-220.201 (5) was amended on September 03, 2006 to include a provision requiring a 10% fee cap be placed upon Public Adjusters when the Governor issues an Executive Order declaring a State of Emergency.  The fee Cap would apply to those contracts entered into with the consumer whose property is located in the county(s) for which the state of emergency applies. This amendment has diminished the Departments need to issue emergency rules for the purposes of regulating Public Adjusters. 

On May 16, 2006, 626.8795, F.S.  became law which prohibits a Public Adjuster from entering into multiple contracts pertaining to the same property which could cause a “conflict of interest”.  An example would be a Public Adjuster who is also a licensed contractor entering into contracts to both repair and provide adjusting services for the same property.  

Any complaints or information regarding suspected violations by any type of adjuster can be faxed to the department’s Bureau of Investigation at 850-488-5951 or e-mailed to This email address is being protected from spambots. You need JavaScript enabled to view it. .

Hurricane Andrew - $20 Billion in Insured Losses and Thousands of Adjusters

As a result of Hurricane Andrew the then-Department of Insurance issued approximately 8,300 Emergency Adjuster licenses.  At the height of adjusting activities the insurance industry reported to the Department that it had a total of 17,400 adjusters on the ground adjusting Andrew-related claims.  Determining the precise number of adjusters is difficult.

The Florida Insurance News Service and Insurance Information Institute reported at the time that about 25 percent of all available property and casualty adjusters in the country came to Florida at one time or another to handle Hurricane Andrew claims.

OIR Informational Memorandum stating that the percentage deductible does not apply to Tropical Storm Fay claims because the system was never declared a hurricane by the National Hurricane Center.

Deductibles: OIR Declares Hurricane Deductible Does Not Apply to TS Fay


From the Florida Insurance Council; updated on August 20, 2008

Originally, Florida's percentage deductibles applied to any windstorm loss - tornado, thunderstorm, tropical storm, hurricane. The 1997 Legislature, with the industry's support, agreed in the mid-1990's to limit percentage deductibles to hurricane losses. Current Florida law on percentage deductibles (Section 627.701, F.S., 1997) was patterned after Hawaii's  percentage hurricane deductible, the only law in effect at the time. The Florida Insurance Council believes the statute is clear as currently worded. However, FIC has supported efforts over the past several years to make it even clearer. 

There was some confusion over application of the hurricane deductible following Hurricane Irene, which came ashore October 15-16, 1999,  in Dade, Broward and Palm Beach counties. Irene caused $100 million in wind damage and $100 million in flooding losses. Some south Florida homeowners complained because the hurricane deductible was applied even though it was never clear Irene produced hurricane-force winds over the Florida mainland.

Common misconceptions include:

  • The hurricane deductible is triggered by a hurricane watch or warning from the National Hurricane Center, allowing insurers to impose it regardless of whether hurricane-force winds ever hit the state.
  • Once the hurricane deductible is triggered, it can be applied anywhere in Florida, even for an unrelated weather event hundreds of miles away. Section 627.4025, Florida Statutes, provides that application of percentage hurricane deductibles  is triggered not by a watch or warning, but by windstorm losses resulting from  "a storm system that has been declared to be a hurricane by the National Hurricane Center of the National Weather Service." The deductible was appropriate for Irene claims because the Irene system had been declared a hurricane, regardless of whether hurricane-force winds occurred over mainland Florida.

As the Senate Banking and Insurance Committee noted in its September 1999 study, "on a case by case basis, it may be difficult to determine whether a windstorm loss in a particular county or area was caused by or resulting from a hurricane particularly if the wind speed is below hurricane force winds (which is very difficult to determine) and is geographically distant from the center of the storm system." The key is that the system had been declared a hurricane at some point and that the losses resulted from that system, the standards established by Hawaii. 

Section 627.4025 restricts the duration of the insurance industry's application of the percentage deductible. The hurricane deductible can be imposed beginning "at the time a hurricane watch or warning is issued for any part of Florida," continuing "for the time period during which the hurricane conditions exist anywhere in Florida" and ending 72 hours following the termination of the last hurricane watch or warning."

A hurricane watch or warning does not authorize use of the percentage deductible, but defines when use of the percentage deductible can begin and when it must end - to the benefit of consumers. An insurer could not impose the deductible on damage to a home from a sudden severe thunderstorm when a hurricane system is still hundreds of miles and several days from Florida because a watch or warning would not have been issued. Carriers must stop imposing the percentage deductible 72 hours after termination of the last watch or warning, so damages from severe thunderstorms which often occur a week or more after a hurricane would be subject to the general deductible.

Build it and they will come. Sell it and someone will buy it.

The Florida Underwriter reports that "an Indianapolis agency is trying to solve one of Florida ’s insurance problems – the large deductible required in homeowners’ and commercial property coverages . CITON Agency’s ZERO SELECT Wind Deductible Elimination Plan will pay 100 percent of the total homeowners’ or commercial policy’s deductible if damage estimates from a named storm or event exceed the deductible dollar amount. Kenneth Gregg, CEO and chairman of the Indiana-based company, said he spent two years designing and developing the hurricane/wind deductible elimination product.

“'Our intent is to cover any wind or hurricane deductibles out there,' Gregg told the Florida Underwriter. 'As long as they have primary coverage in place, we will write it...Even as a storm is rushing toward the state... We’ll write it...But if it makes landfall within seven days, it’s not covered. On day eight, it is covered.'”

See the company's  Internet site:

Here is a news release announcing the product:

CITON Launches Innovative Hurricane/Wind Deductible Elimination Product in Florida

INDIANAPOLIS, IN. - CITON Group has launched an innovative new hurricane/wind deductible elimination product designed to fill a gap for current policy holders and protect them in their time of need.  ZERO SELECT Wind Deductible Elimination Plan will pay 100% of the total deductible if damage estimates exceed the deductible dollar amount.

With 2008 projected to be a busier than average hurricane season, now is the perfect time to provide some much needed protection to homeowners, commercial residential and commercial business property owners.  This is comforting considering that over the last five years there have been more than 6 million catastrophic hurricane claims in the U.S. totaling more than $86 billion in losses (source: ISO’s Property Claim Services Unit).

“The consumer holds a tremendous risk given that deductible amounts continue to climb,” said Chairman and CEO Kenneth Gregg. 

“I had a friend from the Ft. Meyer’s area who called me after experiencing one of the ’05 hurricanes,” noted Gregg. “His deductible was $25,000 and the damage estimates put the cost at over $50,000.  He didn’t have an extra $25,000 to pay off his deductible.  This was quite disconcerting for both me and my friend.”

Gregg, a veteran of the insurance industry, spent two years designing and developing the product that agents can provide current insurance policy holders.  Gregg’s industry knowledge has also allowed him to develop a process that addresses customer’s biggest concern in the insurance process: paperwork.

Our underwriting process is simple,” he said. “We developed a streamlined, online underwriting system, which features limited documentation requirements and makes for a quick approval.”
In addition, processing a claim requires only one phone call and one fax.  Accepted claims are processed in 48-hours.  Gregg is certain that this new product line will enable a return to life and business quickly with minimal inconvenience and cost.

CITON has created strategic relationships with several MGA’s in the Florida area and will expand those relationships to other markets throughout the summer. Agents can access CITON’s hurricane/wind deductible elimination product through one of the MGA’s or directly through CITON at

“The reception from the agents so far has been overwhelming,” states Gregg. “They understand that this is another item in their tool box to meet the needs of their clients. As consumers find out about the product we expect them to drive demand  even further.”

Gregg urges all hurricane/wind policy holders to contact their agents and ask about the new ZERO SELECT Wind Deductible Elimination Plan. 


For more information, contact Darrin Brooks at 317-818-7605