Brandes on insurance bill: ‘Too little, too
Article Courtesy of The Catalyst
By Mark Parker
June 10, 2022
St. Petersburg Sen. Jeff Brandes believes the
recently signed property insurance bill could mitigate many of Florida’s
problems – if the Legislature passed it in 2019.
Brandes, long a vocal proponent for
property insurance reform, led the calls for a special
session to address the issue in April after lawmakers failed
to agree on a bill during the regular session in March. The
term-limited state senator got his wish as Gov. Ron DeSantis
reconvened the Legislature and signed a new bill into law on
The governor called the bill “the most significant reforms
to Florida’s homeowner’s insurance market in a generation”
in a statement following the signing. However, many
lawmakers from both sides of the aisle feel the legislation
did not do enough to protect companies or lower premium
“The problem is – and I said this during the debate – what
we have, is Stage 4 cancer in the property insurance
system,” Brandes told the Catalyst. “And we’re treating it
with Stage 1 solutions.”
Brandes called the bill “too little, too
late” and said it is not nearly enough to help the industry
or consumers. He said the biggest challenge in Florida is
fraudulent roof claims, and the solution is realigning
He said he pushed hard for companies to
provide actual cash value rather than paying for the cost of
a new roof. He explained that if someone totals their 2010
Toyota Corolla, their auto insurance does not offer the cash
value of the latest model.
St. Petersburg State Sen. Jeff Brandes believes the
governor could call lawmakers back to Tallahassee for a second
special session on property insurance.
“If you have an insurance claim on a roof that’s 20 years old, the
company will buy you a brand new roof, and many are forced to offer that
kind of coverage,” said Brandes. “That changes the incentives.
“We would have a lot more car accidents, I guarantee, if your insurance
company had to buy you a brand new car …”
WFLA reported that the same day the governor signed the reforms into
law, Southern Fidelity Insurance Company notified agents it was
suspending new business and renewals until they could assure complete
reinsurance coverage. Two other companies said they were limiting new
business in the state last week.
Brandes said the incentive to file a claim and exchange an old roof for
a new one is why Florida accounts for 80% of the nation’s property
insurance litigation but only 8% of open claims.
The new bill moved quickly through the House and Senate with mostly
bipartisan support. Lawmakers were anxious to get legislation – even as
a first step – passed before the June 1 start of hurricane season. The
new law creates a $2 billion Reinsurance to Assist Policyholders program
to help companies mitigate risks.
The legislation also forbids companies from automatically denying
coverage because of a roof’s age – if it is less than 15 years old.
Brandes said that stipulation may seem consumer-friendly but will lead
to insurers denying claims for other reasons.
“For example, age of home,” added Brandes. “That’s perfectly fine and
Many companies, said Brandes, will have no choice but to find ways to
reduce their exposure to litigation.
“If you squeeze a balloon on one end, the air is going to rush to the
Brandes called the bill necessary to save some carriers but not
sufficient. In the coming weeks, he expects more insurers to have their
ratings withdrawn and potentially release 100,000 additional policies
into the market just as hurricane season gets underway.
Other private companies cannot absorb that many policies, said Brandes.
Many will go to Citizens – the state-backed insurer and typically a last
resort for homeowners struggling to find coverage in the private
Brandes noted that lawmakers avoided addressing concerns with the
subsidized insurer, which projects to hold over a million policies by
the end of the year. He believes Citizens could reach that milestone by
the third quarter and said it is hard to steer homeowners out of
Citizens because its rates are “generally half” the cost of a
traditional market-based policy.
“Citizens only has $6 billion in reserves and yet has potentially $300
billion in liabilities,” said Brandes. “We would never let a regular
insurance company grow as fast as Citizens is being forced to grow,
because you can’t build reserves fast enough.”
Citizens’ exponential growth is a risk for every Floridian, said Brandes,
because the lack of premiums to cover the risk exposure will affect the
state’s bond rating. He added that Citizens’ rates are set politically
rather than based on “actual rules.”
Brandes said that before 2006, the state required Citizens’ rates to
remain competitive with the top 10 insurers in a region. He said people
are now abusing the program, as a third of all the subsidized policies
are for second homes.
“So, what ends up happening is, millionaires from New York can come
down, buy a home in the Keys and get it subsidized by Citizens,” said
Brandes. “And you and I get to pay the bill if they actually have a
The situation is so critical that the senator believes lawmakers could
once again reconvene in Tallahassee in the coming months.
Brandes believes the governor will call another special session if
insurers cancel 200,000 to 300,000 policies in the coming weeks, which
“is not an unlikely possibility.” He said a named storm – or any storm,
for that matter – is a reason for roofers and lawyers to coax homeowners
into making a claim.
“They see it as they just found a pot of gold at the end of that
tropical storm,” he said. “The Legislature did very little to slow down
the amount of litigation.”
Brandes, term-limited in November, said he will attend every special
session between now and election day. In the meantime, he is touring
prisons and continuing to advocate for his other passion – criminal
Brandes is still committed to starting a non-profit policy firm to
continue working on issues close to his heart. That includes
transportation and affordable housing, in addition to property insurance
and criminal justice reform. He said he does not want to leave the work
unfinished, and looks forward to sharing the knowledge acquired over his
12 years in office.
“I’ve worked really hard over the last decade to learn this stuff and to
become an expert in these topics – or at least as expert as I can be,”
said Brandes. “And so, I want to continue to work on that and educate