The House took up a Senate-backed reform package on homeowners insurance. But amendments passed in the lower chamber introduce new language that would allow rate increases on Citizens Property Insurance rates.
The bill (SB 76) as a whole aims to fight rising premiums. But Rep. Bob Rommel, a Naples Republican, said the state must also address a looming financial crisis within the state’s publicly managed insurer of last resort.
“This is the fastest growing insurance company in America,” he said, “and it’s state-owned.”
Rommel carried the House companion (HB 305) to the Senate legislation this year. Along the way, he’s absorbed many of the controversial aspects of the bill passed in the upper chamber. The bill would reduce the time to file claims from three years after an incident to two years.
It also will allow insurance carriers to sell roofing policies that cover the depreciated cash value of a roof and not its full replacement cost, but said the companies still should have that full coverage available and must include a disclaimer with the policies.
Also, the legislation greatly cuts down the money lawyers can make from fees related to claims lawsuits by limiting use of a contingency risk multiplier.
An amendment passed Tuesday on the House floor also introduces some issues tackled in the House, most notably related to Citizens.
The public insurance now may only raise rates by 10% each year. At a time when private carriers are hiking renewal rates by as much as 40%, that’s pricing policies much lower than the rest of the marketplace. Meanwhile, the cost of claims and court visits, which Rommel said is what’s driving the rates higher in the private market, expose the state to as much risk or more.
His amendment would gradually increase how much Citizens can raise its rates to where it can bump costs by 15% in 2026.
Rommel said Citizens now enrolls roughly 5,000 new policy holders each week. Meanwhile, it holds roughly $7 billion in the bank in case of claims. But risk estimators say a catastrophic Hurricane Andrew-type event could expose Florida to $100 billion in damages.
“We are still handicapping Citizens against private companies whose rates go up for market conditions,” Rommel said.
Democrats in the House, as occurred in the Senate, greeted the bill with skepticism, suggesting the legislation does more to help insurance companies than consumers.
To drive home that point, Rep. Evan Jenne, House Democratic Co-Leader, filed his own amendment that would require consumer rates go down should the protections for carriers go into effect.
“We will ensure the savings promised will actually benefit your constituents, not just the profits for insurance companies,” Jenne said.
Jenne suggested the state may hold more responsibility for rising premiums because the Office of Insurance Regulation, which he re-dubbed the “Office of Insurance Rubberstamping,” had not denied a request to hike rates at any point in living memory.
But that amendment and others offered by Democrats were shot down in the chamber.
If the bill passes on the House floor as expected Wednesday, it will bounce back to the Senate in amended form.