Lawmakers’ solution to property insurance ‘crisis’ won’t solve issues right away, expert says

TALLAHASSEE, Fla. – Insurance experts are calling it the most groundbreaking property insurance reform legislation ever introduced in the state of Florida.

Florida lawmakers were in Tallahassee on Monday for the start of a special session where they are trying to tackle Florida’s property insurance crisis.

The new legislation is on a fast track for approval because of the strong consensus between the Republican leaders of the Florida House and the Florida Senate. Lawmakers are reviewing two bills that they hope will stabilize the market.

Insurance experts said the bad news for Florida homeowners is that their insurance premiums will likely go up before they start to go down, and all of Citizens Insurance’s policyholders may soon be required to purchase flood insurance.

“We are one of many homeowners across the state experiencing a lack of access to competitive policies,” homeowner Caroline Melier told members of the Legislature during testimony.

Lawmakers heard from everyday people at the State Capitol about the high price of their property insurance. And the crisis the property insurance industry is in with no clear relief in sight.

″We want to make it easier to report fraud, which we understand, we know there are fraudulent claims, which we understand higher fraud, leads to higher property rates for all of us,” said Rep. Fentrice Driskell a Tampa Democrat.

Two almost identical bills are winding their way through the House and Senate addressing these four main areas of concern.

  • Litigation abuse
  • Assignment of benefits abuse
  • The growth of Citizens Property Insurance – the state-backed insurance company
  • Mandatory Flood insurance for Citizens policyholders

“Citizens is going to require all its policyholders to have flood insurance. And the reason why this is such a significant issue right now is what we saw after Hurricane Ian. So many homeowners suffered devastating losses from the Category 4 hurricane yet had no flood insurance,” said Mark Friedlander of the Insurance Information Institute.

Friedlander is the spokesperson for the institute, an insurance industry group. If the legislation passes, he anticipates all 1.2 million Citizens policyholders will be required to purchase flood insurance, after the state of Florida saw somewhere between $25 and $45 billion in damage from Hurricane Ian.

The Florida Legislature is also addressing litigation abuse with a provision in the proposed legislation that eliminates what’s called “one-way attorney fees.”

″What that means is when a homeowner sues an insurer, and if they are awarded even one dollar in compensation for that lawsuit, the insurance company is required to pay 100 percent of their attorney fees,” Friedlander said.

Lawmakers are also trying to decrease the number of insurance policies being held by Citizens insurance. It’s supposed to be an insurer of last resort. Friedlander said if the legislation passes, “When you get a renewal bill from Citizens, you will be required to get quotes from the private market as well. And if your private market quotes are within 20% of the premium costs of citizens, you will be required to move to a private insurer.”

The legislation also includes provisions that:

  • Eliminate the Assignment of Benefits (for insurance claims)
  • Shortens the amount of time homeowners have to file a claim from two years to one year
  • Provision that creates Florida Optional Reinsurance Assistance Program, which would be a financial resource for carriers

Unfortunately, nothing lawmakers do in Tallahassee this week will result in an immediate reduction of Floridians’ insurance premiums.

“No legislation will fix the crisis immediately,” Friedlander said. “You will still see large increases on your premium bills, at least for the next year or more.”

The Republican party now has a supermajority in the Legislature which will help push these bills and any amendments through the House and the Senate quickly, with a final vote on this legislation expected before Wednesday night.

About the Author:

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