Property Insurance Bills Clear First Hurdle, Lawmakers Concerned Residents May Not See Relief for Another Year

May 23, 2022 Updated 4:17 P.M. ET

TALLAHASSEE (FLV) – A Senate committee passed legislation Monday during the special session that lawmakers hope will stabilize the property insurance market and provide relief to homeowners facing skyrocketing premium rates. 

State Sen. Jim Boyd is the sponsor of the legislation that aims to address the market lawmakers said is falling apart. The Senate Appropriations Committee took up the legislation Monday.

“This is a problem that is getting worse. Homeowners are suffering increasing premium rates and markets are dropping and carriers are fewer than they were before,” Boyd said during committee. 

Several insurance companies have gone into liquidation and have canceled policies, leaving thousands of people scrambling to find insurance. Premium rates have also soared for Floridians allegedly due to frivolous lawsuits against insurance companies.

The proposed legislation would provide $2 billion in reinsurance relief to insurance companies, giving them another layer of protection. 

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

“I believe it does balance fair cost and protections for consumers while adding reasonable guardrails for insurance companies to help address the fear of frivolous litigation and fraudulent claims that we’ve all seen over the past several years that have gone up,” Boyd said. 

Another major portion of the legislation aims to crack down on those frivolous lawsuits. Boyd said in 2021 76% of the lawsuits in the country were filed in Florida but 7% of claims were filed in Florida. Experts have said higher insurance rates are many times due to frivolous lawsuits against insurance companies that eventually put them out of business. 

“It is insurance fraud for a contractor to deceptively waive, refund or pay a deductible,” Boyd said. “And it’s also insurance fraud to intentionally file an insurance claim containing false fraudulent or misleading information.”

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

However, many lawmakers on the committee, especially Democrats, were disappointed that Florida residents may not feel that relief for another 12 to 18 months. 

“It’s not very comforting to know that that that will be a year to 18 months,” Democrat State Sen. Linda Stewart said. “I don’t think we came here thinking it would be anything like that.”

Sen. Boyd said while consumers will not see significant relief for more than a year, rates could decrease once insurance companies are allowed to tap into that $2 billion reinsurance program since companies would not need to pay for reinsurance. 

“It’s not going to be huge but it’s a rate decrease. So that component will help,” Boyd said. “But the rest of it takes a while and sadly that’s the case.”

Richie Kidwell, president of Restoration Association of Florida, spoke against the bill during committee. 

“The whole reason why we are here is because the Office of Insurance Regulation was saying that all the litigation occurs from here but then when you ask them for that data, there’s no data,” Kidwell said. “We’re all here based off false accusations.”

Also under the legislation, 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. 

The committee also passed a bill (S.B. 4-D) that would prohibit insurance companies from denying coverage based on the age of a roof that is less than 15 years old.

Both bills are on the special order calendar in the Senate for Tuesday.