Courtesy of WINK NEWS
Published May 27, 2022
The Florida Senate on Tuesday approved a sweeping
legislative package meant to combat rising property insurance rates and
other problems in the state’s turbulent insurance market, creating a $2
billion reinsurance fund and writing new rules around coverage denials and
Republican-controlled Senate approved the legislation after
hours of debate. The proposals now await passage in the
House, which is expected Wednesday.
The bills come as part of a special legislative session
focused solely on property insurance. Lawmakers failed to
pass insurance reforms earlier this year during their
regular session, which was dominated by contentious partisan
fights on bills involving race, gender identity, sexual
orientation and abortion.
In the debate Tuesday, Senate Democrats pushed to grant
immediate rate reductions or freezes for property owners but
their amendments were rejected by Republicans who argued the
legislation was the best path to stabilize the market in the
long term. GOP legislation sponsor Sen. Jim Boyd said the
measures would not result in rate decreases before 12 to 18
constituents, who I have spent quite a bit of time with over
the last several weeks and months, are in desperate,
desperate need, not for 18 months from now — today, tomorrow
the next day, certainly before hurricane season,” said Sen.
Lauren Book, a Democrat.
Sen. Jim Boyd, R-Bradenton makes a point about his
Senate Bill CS/SB 2-D: Property Insurance in the Florida Senate
Tuesday, May 24, 2022 at the Capitol in Tallahassee
The proposals would create the $2 billion Reinsurance to Assist
Policyholders program for insurers to purchase insurance to help insulate
themselves from risk. In order for an insurer to access the fund, it would
have to reduce policyholders’ rates.
The bills would forbid insurers from automatically denying coverage because
of a roof’s age if the roof is less than 15 years old. Homeowners with roofs
15 years or older would be allowed to get an inspection before insurers deny
them coverage. If an inspection shows that a roof has at least five years of
life remaining, insurers can’t refuse to issue a policy only based on the
roof’s age, under the proposed legislation.
If a roof is more than 25% damaged but already complies with the state’s
2007 building code, it would only have to be repaired instead of replaced
under an exemption to the building code that the proposed legislation
Another measure would provide grants worth up to $10,000 each to retrofit
homes so they are less vulnerable to hurricane damage. To qualify,
properties would have to have insured values of $500,000 or less, be
homesteaded, constructed before 2008 and located in areas where wind speeds
from storms can exceed 140 mph (225 kph). Homeowners would get $2 from the
state for every $1 they invested in mitigation efforts.
“Obviously, you want to pay lower rates, but if you make improvements, you
avoid damage in the first place, so that’s going to help,” Republican Gov.
Ron DeSantis said at a Tuesday news conference in Havana, Florida. “I think
these reforms are positive.”
The legislation also seeks to limit various attorney fees in
insurance-related cases, which insurers blame for much of the rate increases
for policyholders. Supporters of the legislative package have frequently
noted that Florida accounted for 9% of all insurance claims filed nationally
but nearly 80% of all the property insurance lawsuits.
The bills would allow for more state oversight so regulators can spot
trends, analyze reasons and try to prevent the future failure of insurers.
The insurance industry has had two years of underwriting losses exceeding $1
billion each year and several insurance companies have either gone
insolvent, required midterm cancelations, are in liquidation or have stopped
writing new business since 2021, the governor said in his proclamation
calling lawmakers back to the Capitol.
THE INSURANCE REFORM BILL SB 2-D ER