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Politics

Fla. senators push plan to cut insurance rates

By WES ALLISON
Published March 21, 2007

WASHINGTON - Florida's U.S. senators outlined an ambitious plan Tuesday that's aimed at cutting the rates and boosting the availability of property insurance, but they acknowledged the best they probably could hope for was a commission to study the problem.

The six-pack of bills announced by Sens. Bill Nelson, a Democrat, and Mel Martinez, a Republican, includes a national catastrophic fund to help insurers recover from the costs of major disasters, as well as tax-free savings accounts for disaster repairs and tax credits for hardening homes against hurricanes.

With high property insurance rates squeezing homeowners and businesses in Florida and other coastal states, Nelson and Martinez said coastal-state politicians are under tremendous pressure to find solutions.

But they also said the national political landscape for reform is rocky, given opposition from the insurance industry and disinterest among interior-state lawmakers who don't think their constituents should help subsidize residents on the coast.

"We are trying to get all the ideas on the table, realizing just how difficult the political situation is, and how the players are all split up," Nelson said.

Nelson and Martinez said they introduced the bills to bring the issue to the forefront, and the Senate Banking Committee has scheduled an April 11 hearing on property insurance.

While some of their proposals, such as coordinating federal research into hurricane predictions and preparedness, may not hit too much opposition, they hope the bills generate enough pressure to convince Congress to create a national commission of experts to study the property insurance crisis.

Although Florida and other Southern coastal states are most often the targets of hurricanes, earthquakes, tornadoes, drought and other disasters could cause an insurance crisis in other states.

Nelson and Martinez said they hope to convince their colleagues to consider comprehensive reform.

Some highlights of the bills:

Create a National Catastrophe Fund funded through insurance premiums to backstop state catastrophe funds, like Florida's.

Allow property owners a tax deduction of up to 25-percent of expenses, up to $5,000, for improvements aimed at reducing storm damage.

Create a 10-year, $4.35-billion initiative to build a foundation for more coordinated research into hurricanes and preparedness.

Allow pre-tax savings, like a medical flex account, for disaster expenses.

Allow insurers to build up non-taxable reserves to be used to pay claims in a major disaster.

[Last modified March 20, 2007, 22:19:09]