Don Gaetz, Alex Andrade push bills to help curb cost of property insurance

Could property insurance relief finally be coming for Floridians? Newly filed legislation will be targeting Florida’s rising costs, aiming to improve the state’s claims process and increase rate transparency.

Crestview Republican Sen. Don Gaetz and Pensacola Republican Rep. Alex Andrade have filed bills (SB 554, HB 451) to reduce property insurance costs across the board.

“Floridians pay far more for property insurance than anyone anywhere else in the nation,” Gaetz and Andrade said in a news release. “Admittedly, Florida is a high-risk market, but we believe there are steps the Legislature can take to improve how rates are set and how individual claims can be processed faster and fairer.”

The legislation would require insurance companies to pay businesses and homeowners who have suffered losses promptly while streamlining the adjustment process to eliminate delays and reach fair settlements. The bills would further open the books of insurance companies that are asking to increase their rates and provide a way for attorneys fees to be paid by each side during the claims process.

While the Legislature has tried to keep insurance rates lower by eliminating unnecessary litigation costs, both Gaetz and Andrade say the measures have not done enough to help as rates have continued to climb over the past two years.

“High property insurance rates are one of the reasons in-migration has slowed,” Gaetz said. “High insurance costs make the Free State of Florida into the Unaffordable State of Florida for many seniors on fixed incomes trying to stay in their homes, young families including military families trying to buy their first homes and businesses of every size.”

It has been proposed that adjusters working for insurance companies or claimants make damage assessments available in a machine-readable format. Adjusters would be required to use software selected by the state insurance commission for their estimates, which would be subject to current data on market costs, eliminating delays in reaching settlements.

Furthermore, insurers would be required to reveal compensation packages paid to executive officers, with the news release stating there have been several examples of insurance companies excessively compensating company officers, while “pleading poverty” to state regulators.

The bills would increase transparency by requiring insurance companies to disclose any self-dealing with related companies when they are seeking to increase rates, while the Office of Insurance Regulation would be able to use revelations of self-dealing and executive compensation when analyzing an insurance companies’ true financial condition.

“The state’s sources of revenue are also impacted,” Andrade said. “The State Economist’s three-year forecast shows that our ability to pay the costs of public education, health care and other important expenses of state government are negatively affected by the increasing costs of property insurance. Local governments, hospitals and school districts must pay for property insurance, too.”

Furthermore, insurers would be required to reveal compensation packages paid to executive officers after there have been several instances of insurance companies excessively compensating company officers, while “pleading poverty” to state regulators.

Penalties on insurance companies who “drag their feet” when paying settlements would be increased, while establishing a fair way for both insurance companies and policyholders to share the cost of litigation.

“There is no silver bullet that will automatically drive down property insurance costs,” Gaetz and Andrade said. “But we need to do more than reduce litigation. Our bill tackles other drivers of insurance costs and provides a transparent framework for honest rate-setting and prompter payments.”