Article
Courtesy of Tampa Bay Times
By
Lawrence Mower
Published May 23, 2022
|
|
|
|
TALLAHASSEE — State lawmakers Friday night unveiled proposed legislation
that would allow homeowners with older roofs to still get property insurance
and create a fund for Floridians who want to upgrade their homes.
Under a policy plan unveiled three days before lawmakers return to
Tallahassee to tackle Florida’s property insurance crisis, companies would
be blocked from denying coverage because of a roof’s age if the roof is less
than 15 years old.
And for roofs that are older than 15 years, insurers would have to allow
homeowners to have an inspection on the roof’s condition before refusing
coverage. If the inspection shows the roof has five or more years of useful
life left, the insurance company could not reject coverage simply because of
age.
The ideas are meant to halt one of the worst side effects from the state’s
insurance crisis. As insurance companies have seen a rise in roof claims,
they’ve refused to insure homes with older roofs, shedding policies and
forcing homeowners to spend tens of thousands of dollars on a new roof just
to get coverage.
The proposals were announced after weeks of negotiations between leaders of
the House and Senate and staff working for Gov. Ron DeSantis, who earlier
this week promised “a very significant package” to address the crisis.
In addition to roofs, lawmakers are proposing:
-
Assigning $2 billion to a new reinsurance program —
insurance that insurers buy — to cover losses during hurricane season.
Insurers that buy into the program would have to reduce homeowners’
rates by June 30.
-
Creating a host of limits on attorney’s fees in
lawsuits against insurance companies. Insurers have blamed lawyers for
causing double-digit rate increases for most Floridians.
-
Allowing Floridians to receive up to $10,000 for
home-hardening improvements on their homesteaded properties valued at
$500,000 or less. Homeowners would receive $2 for every $1 they spend.
“The proposal balances fair costs and protections for
consumers,” Sen. Jim Boyd, R-Bradenton, wrote to senators Friday night,
“while adding reasonable guardrails for insurance companies against the
frivolous litigation and fraudulent claims that drive up rates for
everyone.”
Lawmakers would also keep a closer eye on insurance companies that fail.
Within two months after an insurer is ordered into insolvency, the state
would have to conduct a report about why the company failed. Earlier this
week, the Times/Herald reported that while state law requires such reports
to be done, the reports are completed years later, and few people knew such
reports existed.
The Office of Insurance Regulation would also create a new “insurer
stability unit to increase regulatory oversight,” and the office would be
required to open an investigation “when consumer complaints suggest a trend
in the marketplace rather than an isolated incident,” according to a summary
of the legislation by the House of Representatives.
Lawmakers are being recalled to Tallahassee because they failed to agree on
legislation to address the property insurance crisis during their 60-day
legislative session earlier this year.
While the changes announced this week could quickly address one aspect of
the crisis — denials for older roofs — it remains unclear whether the
changes will result in serious relief for Floridians experiencing
double-digit rate increases.
For months, observers and analysts have been warning that without
significant reforms, the property insurance crisis would pose a terrifying
threat to homeowners.
“They’re going to lose their homes. They’re going to be forced to sell their
properties,” Mark Friedlander, director of communications for the
industry-backed Insurance Information Institute, told a panel hosted by a
ratings agency on Thursday. “They can’t afford the insurance anymore.
They’re going to have to give up that lifetime investment of their home and
put it on the market because now their premium is higher than their mortgage
payment.”
The proposed legislation would create an exemption in the state’s building
code, so that roofs that are more than 25% damaged but already comply with
the 2007 building code may be repaired instead of being required to be
replaced.
Insurance companies would also be allowed to offer policies with a separate
roof deductible that would not exceed 2% of the policy dwelling limits or
50% of the roof replacement costs. Homeowners would be required to get a
discount for selecting that policy, and the deductible would not apply if
the home is a total loss, or damaged by a hurricane, a fallen tree branch or
a roof loss requiring a repair of less than 50% of the roof.
|