DeSantis Signs Property Insurance Overhaul to Stabilize Market
FORT MYERS BEACH (FLV) – Gov. Ron DeSantis signed a sweeping property insurance bill that aims to stabilize a crumbling insurance market.
“We have to create an environment where people want to come in and compete for your business,” DeSantis said. “That’s the only way you’re ever going to have a stable situation.”
The Florida legislature approved the bill during a Special Session as Floridians face soaring rates, insurance companies declare insolvent, as well as leave the state and drop policyholders.
Republicans Rep. Tom Leek and Rep. Bob Rommel sponsored the bill in the House. Republican Sen. Jim Boyd sponsored the bill in the Senate.
“What this bill signifies to me is hope,” Leek said. “Hope and a plan to make sure that we as a state of Florida are doing everything we possibly can to repair a broken property insurance market.”
One of the main reasons insurance companies are fleeing Florida is due to one-way attorney fees incentivizing lawsuits. Florida has about 7% of the property insurance claims in the country but the state has more than 70% of the litigation nationwide.
The bill eliminates one-way attorney fees in an effort to eliminate those “frivolous” lawsuits.
“This bill reigns in the incentive to litigate,” DeSantis said. “There’s reason why these companies have left the state.”
It removes the ability of a policyholder to execute an Assignment of Benefits for property insurance policies in an effort to reduce the number of lawsuits.
With regards to the state-backed Citizens Property Insurance Corporation, the bill would increase the eligibility criteria for someone to be insured by the group. It reduces the time for insurers to acknowledge a claim, begin an investigation and conduct a physical examination.
The legislation also creates a $1 billion one year Florida Optional Reinsurance Assistance (FORA) Program for companies to tap into for the 2023 hurricane season. Reinsurance is a reimbursement system that protects insurers from high claims.
“What we did in May I think prevented a major meltdown,” DeSantis said. “This will I think add some more stability.”
More Details on Property Insurance Bill
Throughout the Special Session, one of the main concerns Democrats expressed was that the legislation would not “guarantee” a rate reduction and immediate relief.
“If we don’t come up with a short term solution right now, we are going to pay a lot more on the back end. I will tell you that I have so many people who are slated to be homeless as a result of not being able to afford the premiums,” said Democrat Marie Paule Woodson on the House floor.
Republicans said people could expect rate reductions in the next year or two.
