Florida Lawmakers Debate Property Insurance Bills to Stabilize Market on a ‘Respirator’

Published May. 24, 2022, 6:25 p.m. ET | Updated May. 24, 2022

Florida Capitol.
Florida Capitol.

May 24, 2022 Updated 6:24 P.M. ET

TALLAHASSEE (FLV) – Florida lawmakers debated bills Tuesday that aim to stabilize the property insurance market as thousands of homeowners scramble to find insurance as premium rates jump. 

The full Senate and House appropriations committee passed similar property insurance reform bills (SB 2-D and HB 1-D), moving sweeping reforms to the next step in the legislative process. The Senate approved the bill 30-9 Tuesday. The full House will need to consider the legislation.

Republican State Sen. Jim Boyd carried the bill in the Senate and Republican State Rep. Jay Trumbull carried the bill in the House.

“If I were a physician and I were classifying this as severe, critical, or life threatening or even worse, where would you put this on that scale? And I would say we’re on a respirator in the homeowner’s market in Florida right now and it’s not getting better,” Boyd said. 

The legislation provides $2 billion in reinsurance relief to insurance companies. This is insurance for the insurance companies.

“That will give them the ability to provide that reinsurance level that normally they would have to pay for this, costing them so much in the marketplace right now,” Boyd said. 

Senator Boyd said in committee Monday this should eventually have a trickle-down-effect and relieve consumers who face high rates. Representative Trumbull said in committee Tuesday that insurance companies must reduce their policyholders’ rates by June 30th of 2022 to reflect the savings from this reinsurance program.

The legislation also provides $150 million to start up the My Safe Florida Home program. The program will provide homeowners with grants for hurricane retrofitting and will provide premium discounts. 

“That would be available for folks to redo their roof if they needed to,” Boyd said. “It is a two for one grant. So if a homeowner spends $1, they would get $2. The amount of the program goes up to $10,000.”

The legislation allows property insurers to include in the policy a separate roof deductible of up to 2 percent of the Coverage A limit of the policy or 50 percent of the cost to replace the roof.

Insurance companies would also be banned from denying coverage based on the age of a roof that is less than 15 years old. Insurance companies could not deny claims without sufficiently communicating why. Consumers would be able to more easily access information and records during the claim adjustment process. 

Several insurance companies have gone into liquidation and have canceled policies. Premium rates have also soared for Floridians allegedly due to frivolous lawsuits against insurance companies. Boyd said those lawsuits have put insurance companies out of business. 

It would be a third-degree felony to intentionally file an insurance claim that has false, fraudulent, or misleading information. 

“Also it prohibits the transfer of attorney fees,” Boyd said. “It prohibits assignment of the right to obtain attorney fees in suits arising out of property insurance to third party contractors.”

Insurance companies would be required to do a physical inspection of the property related to a claim within 45 days of receiving loss statements, except in situations where there was a hurricane.

More than 20 Senate floor amendments were proposed with only a few amendments receiving approval. Many Democrats expressed concerns that consumers would not feel relief from these high prices for another 18 months.

Failed amendments include ones to freeze and reduce rates, and cap rents. 

“The reality is that we have entirely failed to do anything that will provide real, guaranteed rate relief to the homeowners who are the ones spending way too much for their homeowners insurance,” Democrat State Senator Gary Farmer said.

Another Senate Democrat proposed an amendment to cap the maximum rate increase to 5% each year for the next two years.

“Let’s level up in protecting our consumers. I believe that this can still be our means of immediate relief and relieving the anxiety of our consumers anticipating rate increases,” said Democrat State Rep. Rosalind Osgood on the Senate floor.

Several amendments were proposed and failed in the House Appropriations Committee. One amendment to limit insurance carriers from dropping policyholders while the policyholder is in litigation failed. 

“When I learned that this is happening, I found it alarming and we should address it,” said Democrat Rep. Ben Diamond. 

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