A program that would allow homeowners to set aside money tax-free in anticipation of catastrophe damage was introduced last month by Rep. Tom Feeney (R-Fla.).
Structured in the same manner as health savings accounts, a catastrophe tax-free savings account could be opened to cover current and future catastrophe-related expenses. The earnings from the money deposited would be tax-free and unused balances would roll over from year to year.
Homeowners with deductibles of $1,000 or less could contribute and hold up to $2,000 in their CSA. For homeowners with deductibles higher than $1,000, the cap would be twice the amount of the individual's deductible, up to $15,000.
The money could be withdrawn to cover qualified disaster expenses tax-free. Qualified expenses would include deductibles, uninsured losses, flood damage, and structural upgrades for future storms. At retirement, individuals could remove the money from the account without penalty.
According to Feeney, the program encourages people to save for the financial impact of a catastrophe, gives consumers the option of choosing a higher deductible for lower premiums, and motivates homeowners to make structural improvements prior to a catastrophe.
“As someone from a state that is often threatened or has been hit by a natural disaster, I understand the need to prepare and save for future disasters,” said Feeney. “Florida has experienced back-to-back record setting hurricane seasons. The disaster in New Orleans has shown us that the federal government is not the most reliable or efficient resource for disaster relief.”
Insurer-Owned Repair Shops Dealt Blow
A Texas U.S. District Court has ruled that a law forbidding insurer-owned auto repair shops is constitutional, according to the nonprofit Automotive Service Association.
Allstate Insurance Company, which owns 15 repair shops in the state that operate under the name Sterling Collision Centers, unsuccessfully challenged the law. According to the company, it still can own the repair shops currently operating, but cannot open any new locations in Texas.
“We strongly disagree with the judge's decision to continue to uphold the provisions of Texas H.B. 1131, which we believe violates the commerce clause of the U.S. Constitution,” said Mike Siemienas, spokesperson for Allstate. “It limits Texas consumers of access to a lawful and legitimate, high-quality, customer-focused, cost-effective repair option. Allstate and Sterling are evaluating all of our options with respect to this ruling, including an appeal.”
“Texas repairers should be very proud and look to how they can continue to improve the collision repair industry,” said Bob Redding, ASA spokesperson. “This decision will have ramifications in the collision industry throughout the United States.”
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
