Senate passes property insurance bill but Speaker Sprowls is skeptical

If you want to know about insurance, ask an agent — Jim Boyd.

The Florida Senate on Thursday passed SB 1728, a bill aimed at reducing property insurers’ costs related to claims. It’s a measure supporters say is needed to halt rampant rate increases for homeowners, but derided by opponents as a risky revision that will boost costs for homeowners while reducing the coverage they receive.

The vote was 28-11, with five Democrats joining Republicans in support. Sen. Gary Farmer, a Lighthouse Point Democrat, led opposition to the measure, saying he was doubtful it will lower rates for homeowners and could hamper their ability to get a claim paid to repair their home.

“It’s always a different excuse for the insurance industry,” Farmer said. “You’re talking about people’s biggest investment in their lives.”

Bill sponsor Sen. Jim Boyd, a Bradenton Republican, defended the measure as essential to lowering costs related to claims, which would, in turn, reduce pressure on rates.

“If we do nothing, your constituents are going to continue to suffer,” Boyd said.

But the bill could struggle to get through the House.

House Speaker Chris Sprowls, a Palm Harbor Republican, on Wednesday sounded skeptical about the need to pass another major property insurance reform, after lawmakers passed SB 76 last year, which reduced attorneys fees in some cases.

“I’m also cognizant of the fact that we just passed a very significant insurance bill last Session,” Sprowls said. “If what has been told to me in the eight years I’ve been here from the insurance lobby is true, which is that it takes 18 months to see an impact in rates — which is what I’ve been told over and over and over again — then I don’t think we are yet seeing the impact we are having in rates by the bill we passed last year.”

Sprowls didn’t rule out passing a property insurance bill, but his lack of urgency stands in contrast to Senate leaders, who have pressed the need to pass something in the face of an insurance market regularly described as in “crisis.”

Many companies have received large rate increases, five companies have canceled 110,000 policies in the last 12 months, and St. Johns Insurance Co. just went into receivership.

The situation led Senate President Wilton Simpson, a Trilby Republican, to declare last month the Legislature “will have failed our citizens” if nothing is done to address the situation.

Boyd said Gov. Ron DeSantis’ office has taken an interest in the issue and gave input on some parts of the bill.

“It’s an issue that’s important to him,” Boyd said. “He understands the gravity of the issue and all of our constituents and what they’re paying for their homeowners’ insurance.”

Insurers report large losses related to frivolous claims or claims with only superficial damage, as well as a surge in lawsuits stemming from claims as the main reasons for their losses in Florida.

The bill contains several provisions aimed at limiting those losses, especially on roof damage claims, as well as getting Citizens Property Insurance, a state-run insurer, to shed policies and get private companies to take the policies.

Boyd’s bill would require contractors issuing advertisements to tell customers they are responsible for deductibles, and that intentionally filing a misleading or false claim is insurance fraud. It also further frees unregulated out-of-state insurers, known as surplus lines companies, to accept policies from state-run Citizens Property Insurance by loosening their rate requirements.

Other provisions would require the select members of Citizens’ board to have at least 10 years experience in the property insurance industry; requires Citizens customers to move to the private market if they receive an offer less than 20% of Citizens’ rate; allows second homes to be subject to larger rate increases from Citizens; allows insurers to require a special deductible for roof damages; and allows insurers to recover “reasonable attorney fees and costs” if a lawsuit is dismissed because a litigation notice wasn’t filed in time.

Amendments offered by Democrats on Thursday to remove the attorney fee provision and to remove the roof deductible provision were rejected by Republicans.

It remains unclear if the House will take up the issue in the remaining eight days of the Legislative Session.

“I’m optimistic that (the House will) consider what we’ve done and then we’ll talk about how to fine-tune it as we move forward,” Boyd said. “If we do nothing … the market will get worse, rates will continue to go up. We just can’t continue to let that happen to Floridians that we’re here to represent.”