Gov. DeSantis to sign property insurance changes into law

Judge gavel and house model property auction for real estate law concept. Lawyer hand holding gavel wooden knocking home ownership for buying selling or foreclosure on nature background.
Citizens customers could see larger rate hikes.

Gov. Ron DeSantis received a property-insurance package Wednesday that could lead to larger rate increases for customers of the state-backed Citizens Property Insurance Corp. while seeking to curb roof-damage claims and lawsuits.

But he added more will need to be done to make the private insurance industry “stronger.”

“I think we got a lot of good stuff done in the legislative session, one of the things we’ll be, I know we worked on, was some property insurance reform, to try to stem some of the problems we see in that market,” DeSantis said, while appearing by video during a meeting of the Enterprise Florida Board of Directors. “We want this to be affordable for homeowners. We don’t want it to be something that is just kind of a pot for litigation. And that really (is) what was happening in Florida. I mean a huge, huge proportion of the money was going to litigation expenses.”

The heavily negotiated bill (SB 76), which passed the Legislature in April, drew criticism from some lawmakers for going too far, while others argued it didn’t go far enough.

The bill was one of five sent to DeSantis’ desk on Wednesday. He has 15 days to act on the bills.

Senate Banking and Insurance Chairman Jim Boyd, a Bradenton Republican, said everybody “had to give a little bit” in negotiations on the bill, which is intended to bolster an insurance market that has seen wide-ranging rate increases and policies pouring into Citizens.

“I do believe it will help the market kind of rebuild itself,” Boyd, the bill sponsor, said when the measure was approved by the Senate on April 30, the last day of the 60-day session.

The bill came against the backdrop of regulators last year signing off on dozens of rate increases topping 10%. Also, private companies have dropped tens of thousands of policies because of financial issues. Citizens, which was created as an insurer of last resort, saw its policy count grow to 589,041 as of April 30, up from 453,911 a year earlier.

DeSantis told Enterprise Florida board members, who met at Embry-Riddle Aeronautical University in Daytona Beach, that the goal is “manageable premiums” and a “stronger private insurance market,” where payments go “to the actual claimants rather than to the attorneys.”

He added that changes will continue to be an issue in future legislative sessions.

“It’s something that we’re working on, and we’re watching very closely,” DeSantis added. “But I think the Legislature did, by and large, a pretty good job on addressing it. But we’re probably going to have to do more going forward.”

In arguing against the bill on the Senate floor, Sen. Annette Taddeo, a Miami Democrat, complained the measure “literally is going to raise the rates” for Citizens customers.

However, Citizens President and CEO Barry Gilway issued a statement when the bill was approved that said the measure offers “meaningful steps to address rising insurance rates caused in large part by unnecessary litigation.”

“Citizens is growing at an unsustainable rate, putting our customers and Floridians on the financial hook when a big storm hits the state,” Gilway said in the statement.

Sen. Gary Farmer, a Lighthouse Point Democrat who was one of five senators who opposed the changes, likened the insurance industry to “Chicken Little” and disputed arguments about major financial problems among insurers.

“It’s a manufactured crisis — a completely manufactured crisis,” Farmer said.

Among the changes in the bill, which will take effect July 1:

— Allowing larger annual rate increases for customers of Citizens. Such increases currently are capped at 10%, but that limit would be gradually raised to 15%.

— Preventing contractors from soliciting homeowners to file insurance claims, including offering incentives to homeowners. That part of the bill is intended to curb roof-damage claims. It also seeks to prevent public insurance adjusters from offering incentives to inspect for roof damage.

— Taking steps to try to limit fees of attorneys who represent homeowners in lawsuits against insurers. That involves using a formula that would look at how much money is awarded in court judgments and how much money was offered by insurers to settle claims before the lawsuits.

— Reducing from three years to two years the time to file claims, with an additional year for supplemental claims.

The Senate initially sought more far-reaching changes to attorney fees and roof-damage claims. In part, it proposed creating a “reimbursement schedule” that would have allowed insurers to sell policies that provide reduced payments for repairing or replacing roofs over 10 years old. For example, insurers could have reimbursed 70% of the costs for metal roofs over 10 years old and 40% of the costs for concrete-tile and clay-tile roofs.

The change would have led to shifting more costs to many homeowners when they have roof damage. But the House balked at the idea, which was not included in the final bill.

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Republished with permission from The News Service of Florida.

News Service Of Florida

The News Service of Florida provides journalists, lobbyists, government officials and other civic leaders with comprehensive, objective information about the activities of state government year-round.


9 comments

  • John

    June 9, 2021 at 3:41 pm

    The reason for unaffordable rates is twofold, First FRAUD. 2nd building codes that have lost sight of value engineering and are driven by insurance companies that want your money without any risk. The State needs to sunset Citizens. Rigid building codes need to go away. Bring real competition back. Insurance charges can be half the price of a mortgage payment.

    Reply

  • Lance Bradford

    June 10, 2021 at 11:43 am

    Desantis said “a huge, huge proportion of the money was going to litigation expenses.”
    Maybe if insurance companies would actually pay claims timely and fairly, and to actual costs of what is covered, there wouldn’t be so much litigation.

    Reply

  • Noreen Parise

    June 10, 2021 at 12:56 pm

    Our Insurance is high enough, we don’t need it to go up anymore. The Insurance company are making a fortune on all of us. It’s getting to the point the elder won’t be able to pay for insurance.

    Reply

  • Karen

    June 10, 2021 at 1:10 pm

    Wonder if Pres. Biden s grandchildren are learning how awful they are because they are white….bet his grandkids aren’t being subjected to being taught how disgusted they should be with theirselves…Teaching our children division in color of skin . We are all God’s children whether you have striped…glow in the dark or chartreuse. God help our grandchildren…children & generations to come if this continues.

    Reply

    • Kelly

      June 10, 2021 at 7:10 pm

      God help you KAREN. You are not well.

      Reply

    • JZ

      June 12, 2021 at 10:43 am

      I could have predicted your name was Karen just by the comment alone!

      Reply

  • Bill Newton

    June 11, 2021 at 9:24 am

    Sen Farmer is right. There is no basis for this increase. Citizens remains stable as it has for years. It has more than enough to pay claims without raising rates. What we see is greedy insurers itching this raise rates to generate more surplus to throw into sketchy investment. Citizens was making a profit off the industries worst customers, denying increases to the private market of carpetbaggers and thieves. Remember who did this.

    Reply

  • Dylan Whitehead

    June 11, 2021 at 11:11 am

    It’s popular to demonize insurance companies, but to say they’re greedy and generating surpluses in the Florida market is wrong. This is from an article in Insurance Journal from October of 2020:

    “Nearly 60 carriers suffered a combined $701 million in losses and $351 million in negative income for all of 2019, according to Guy Carpenter. In just the first half of 2020, the companies lost more than a half billion ($501 million) in underwriting losses and $227 million of negative net income. Third quarter results are expected to show further deterioration. Guy Carpenter’s data cited an average net combined ratio for 2019 of 111 percent that climbed to 129 percent in the second quarter of 2020 for these companies”

    Insurers are just going to start leaving Florida if nothing is done to keep costs in check and rates sustainable.

    Reply

  • Jorge Garcia

    June 11, 2021 at 1:54 pm

    The article is from “Insurance Journal” there is some objectivity issue here i think.

    Reply

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