Florida insurance bills clear committee, move to Senate

The Florida Legislature on Monday began a special session focused on fixing the state’s turbulent property insurance market

TALLAHASSEE, Fla. – The Florida Legislature on Monday began a special session focused on fixing the state’s turbulent property insurance market, advancing sweeping legislation to create a $2 billion reinsurance fund and place new rules around attorney fees and coverage denials as lawmakers attempt to stabilize a market plagued by rising rates and insurer insolvencies.

The Senate Committee on Appropriations approved the measures on near-unanimous votes. The bills now move to the full Senate.

Through hours of committee debate, the sponsor of the proposals acknowledged that they would not immediately drop rates for homeowners but maintained the legislative package is necessary for the long term health of the state’s market.

“It’s very serious. some carriers are on life support, some are about to pull the plug, others are in critical condition. And without reform will go to life support and or pull the plug. so I don’t know that we could be in any worse a position as Floridians than we are,” said Sen. Jim Boyd, R-Bradenton.

Boyd argued his case for Senate Bill 2D, which he coauthored. Boyd says his bill would discourage lawsuits and roofing fraud, the No. 1 driver of out of control insurance rates, and homeowners policies being dropped.

Without significant reform, industry experts say Florida’s insurance crisis could end up forcing people out of their homes because they simply can’t afford to pay for their property insurance.

News4JAX Insiders are sounding off.

“My rates went up by 50%. It’s due again in July so I wonder if I will get jacked again,” Garth wrote.

Robert wrote, “They didn’t drop me, but raised my rates by 40%, and my roof is only 5 years old.”

It’s accounts like these that led to lawmakers gathering Monday in a special session debating SB 2D.

“Where I think the burden is today, is the homeowner insurance premiums going up through the roof because of the bad actors in this market that has caused, this problem,” Boyd said. “I believe if we get our arms around that component, the bad actors will be eliminated.”

The special session comes as Florida’s second extracurricular meeting of the legislature in recent months, following the failure of the GOP-controlled statehouse to pass insurance proposals earlier this year during its regular meeting period. There is also increasing urgency for lawmakers to address problems in the state’s market ahead of the looming hurricane season, which in previous years has brought devastating storms to Florida, such as the Category 5 Hurricane Michael in 2018.

The proposals would create the $2 billion Reinsurance to Assist Policyholders program for insurers to purchase insurance to help insulate themselves from risk. In order for an insurer to access the fund, it would have to reduce policyholder’s rates.

The legislation would forbid insurers from automatically denying coverage because of a roof’s age if the roof is less than 15 years old. Homeowners with roofs 15 years or older would be allowed to get an inspection of their condition before insurers deny them coverage, under the bill. If an inspection shows that a roof has at least five years of life remaining, insurers can’t refuse to issue a policy only based on the roof’s age under the proposed legislation.

If a roof is more than 25% damaged but already complies with the state’s 2007 building code, it would only have to be repaired instead of replaced under an exemption to the building code that the proposed legislation creates.

Another measure would provide grants worth up to $10,000 each to retrofit homes so they are less vulnerable to hurricane damage. To qualify, properties would have to have insured values of $500,000 or less, be homesteaded, constructed before 2008 and located in areas where wind speeds from storms can exceed 140 mph. Homeowners would get $2 from the state for every $1 they invested in mitigation efforts.

The legislation also seeks to limit various attorney fees in insurance-related cases, which insurers blame for much of the rate increases for policyholders. Supporters of the legislative package have frequently noted that Florida accounted for 9% of all insurance claims filed nationally but nearly 80% of all the property insurance lawsuits.

Republican Gov. Ron DeSantis, who called the special session, addressed that issue on Monday.

“The idea that like somehow you have like one shingle off the roof, and then some lawyer comes in and then they end up doing this, there’s a big lawsuit, that is not going to lead to lower rates for people or even stabilizing the market,” DeSantis said.

But, as lawmakers discussed on Monday, their proposed fixes are more about the long term.

“Is there anything in this bill that provides some type of immediate relief for policyholders?” asked state Sen. Rosalind Osgood, D-Broward County.

Boyd said, “Right now, for rate relief, there is no immediate impact. I understand the concern, the reality is these measures we put into place will factor in the rate-making process.”

Boyd told lawmakers on Monday that it will take at least 18 months for homeowners to see their premiums come down from the current high rates if his legislation passes.

The bills would allow for more state oversight so regulators can spot trends, analyze reasons and try to prevent the future failure of insurers. The insurance industry has had two years of underwriting losses exceeding $1 billion each year, according to DeSantis’ office. Several insurance companies have either gone insolvent, required midterm cancelations, are in liquidation or have stopped writing new business since 2021, the governor said in his proclamation calling lawmakers back to the Capitol.

The special session is set to run from Monday to Friday.

About the Authors:

Tarik anchors the 4, 5:30 and 6:30 p.m. weekday newscasts and reports with the I-TEAM.