Florida Governor Ron DeSantis enacted the latest addition to efforts to reform Florida’s property insurance market as lawmakers try to stem price hikes and curb insurance litigation that has swelled claims.
Governor Ron DeSantis signed Senate Bill (SB) 76, which is his latest commitment to Florida insurance reform.
This specific bill restructures the litigation rules for contested insurance claims, reducing the time frames associated with them and reducing the exposure of insurers to lawsuits relating to attorney fees.
It also expressly prohibits contractors, adjusters and businesses from using banned advertisements that encourage Floridians to make an insurance claim for roof damage, which has been a particular factor in problems in the state in the United States. over the years, with fines of up to $ 10,000 to be levied if the law is broken.
Commenting on the signing, DeSantis said, “From my early days in office, I have been committed to doing whatever it takes to reduce the burden of property insurance on Florida families. This includes the signing of historic reforms in the process of awarding benefits and the appointment of principle judges in our state courts. “
“I congratulate Governor DeSantis for taking action today on critical insurance reform,” added Insurance Commissioner David Altmaier. “Today’s action builds on the commitment shown by the DeSantis administration since day one to make meaningful insurance reforms that help protect all Floridians by promoting long-term sustainability. of the Florida insurance market and keeping our market competitive. Thanks to CFO Patronis, President Simpson, President Sprowls, Senator Boyd, Rep. Rommel, and the Florida legislature for developing this thoughtful legislation. Senate Bill 76 takes important steps to address the unique challenges facing the Florida home insurance market, address cost drivers in the market, and help stabilize rates for consumers.
“Florida has become a beacon for businesses that canvass neighborhoods creating roofing claims that would not otherwise be filed, driving up the cost of insurance for everyone. To mitigate these rising premiums, this legislation bans predatory roofing advertising to prevent the abuse of fraudulent claims by contractors trying to take advantage of homeowners, ”commented Senate Speaker Wilton Simpson. “The bill also establishes fair and reasonable guidelines for the insurer and the insured during the claims process. I am grateful to Senator Boyd for his leadership in guiding this legislation to the finish line and to Governor DeSantis for the strong position he is taking to ensure that Floridians have more affordable home insurance that they can rely on. count in the horrific circumstances where a house is badly damaged or destroyed.
“Homeownership is the foundation of the American Dream,” said Florida House President Chris Sprowls. “Today’s reforms to our property insurance market help protect that dream for decades to come by strengthening the market, increasing affordability and protecting consumers from fraud and abuse. This thoughtful and bold reform agenda, which defends Florida homeowners, is made possible by the leadership of Governor DeSantis and strong leaders like President Simpson as well as Senator Boyd and Representative Rommel, who have worked diligently on these issues. complexes to protect Floridians across the state. . “
“Homeowners’ home insurance rates have increased by 20%, 30%, 40% or more in some cases,” said Senator Jim Boyd. “Since 2013, $ 15 billion has been paid in claims in Florida. Of these funds, 71% went to legal fees, 21% to insurers’ defense costs, and just 8% went to homeowners for their losses. Florida accounted for over 76% of all homeowner litigation in the country in 2019. With the adoption of SB 76, I think we’ll see a downward impact on these rates. I appreciate the governor’s leadership on this issue which will save our constituents on their annual home insurance costs.
“The property insurance market in Florida has been in crisis for years,” added Representative Bob Rommel. “In addition to weather events, bad actors are targeting homeowners and insurance companies. Over the past 7 years, insurance companies have paid over $ 15 billion in claims, including over $ 10 billion in attorney fees. SB 76 is a big step towards stopping the abusive practices of these few bad actors, where they encourage homeowners to file insurance claims or even lawsuits. We have over 1,100 people a day moving to Florida and we need to make sure consumers have the ability to get affordable insurance policies from private companies and not just from Citizens, which was originally established as an insurer. of last resort. SB 76 will stabilize the market and should attract new insurers to Florida. “
Rommel’s comment explains one of the main drivers of any economy for the insurance and reinsurance industry as a result of this bill, with the possibility of lower attorney fees becoming a factor in inflation complaints.
However, the other area targeted by the bill is reforming the practice of completely replacing older and only partially damaged roofs, limiting roof replacement claims to the at-time value of a roof. 10 years or more. .
In Florida, if 25% or more of a roof is damaged, the entire roof is usually replaced with insurance. At the same time, contractors pushed for Assignment of Benefits (AOB), allowing them to take over the claim and using unscrupulous methods to push for a complete roof replacement after storms and hurricanes.
This practice was a significant factor in the increase in losses caused by Hurricane Irma in 2017 and Hurricane Michael in 2018.
It is hoped that by putting an end to these practices, thanks to this legislation, the escalation of uncontrolled insurance losses can be stopped and thus insurers can operate more efficiently in the State of Florida, while reinsurance capital will have greater ability to estimate storm-related claims, with inflation and amplification. potentially much lower.
It’s a step in the right direction and another essential deliverable for reforming the property insurance market in Florida.
however, with inflationary pressures on the rise, as explained in our recent video interview, there are other factors that players in the insurance and reinsurance market should be wary of at the onset of hurricane season.