Property Insurance Rates Increase in FL Special Session Topic

FLORIDA — Despite a lukewarm reception to the idea by Florida Republican lawmakers, Governor Ron DeSantis issued a proclamation this week, calling on the Legislature to hold a special session to deal with rising property insurance rates and the cancellation of thousands of homeowners insurance policies.

DeSantis communications director Taryn Fenske said the governor wants the Legislature to consider possible Florida building code changes that would make property insurance more affordable and with civil remedies for homeowners whose policies have been discontinued, had their rates doubled, or received notices that their policies will not be renewed.

The special session will start at 9 a.m. on Monday, May 23 and will continue until Friday, May 27.

At a press conference earlier this month, DeSantis agreed that something needed to be done to stabilize property insurance premiums for homeowners while ensuring that insurance companies don’t walk away. not from the state or failing policyholders due to an increasing number of claims and “the general tort environment in Florida”. related to property insurance that has resulted in thousands of frivolous lawsuits,” he said.

According to Florida Bureau of Insurance RegulationsFlorida accounted for 79% of the nation’s home insurance lawsuits for claims filed, while accounting for only 9% of the nation’s home insurance claims.

In 2020, one of Florida’s most active storm seasons on record with 31 tropical or subtropical cyclones, Florida insurance companies reported their worst fiscal year in decades with $1.57 billion in claims.

After another active hurricane season in 2021, the insurance industry recorded net underwriting losses of over $1 billion.

As a result, three major insurers announced they were dropping or not renewing 53,000 policies ahead of the 2021 hurricane season.

In 2021, four insurance companies became insolvent or had to cancel mid-term. And, in the past three months, three other insurance companies that underwrite homeowners insurance policies in Florida have either become insolvent or announced bankruptcies.

Many more have appealed to the Office of Insurance Regulation to approve rate hikes, stop writing new policies in Florida, or told homeowners that their policies will not be renewed, “leaving tens of thousands of policyholders looking for coverage with limited options in the market,” DeSantis said.

Among these limited options is the state Citizens Property Insurance Corp.

Between 1992 and 2018, nine hurricanes and 11 tropical storms tore through Florida, causing more than $216.1 billion in damage. Unable to remain profitable under the deluge of claims, major insurance companies began pulling out of Florida, prompting the legislature to create the nonprofit Citizens Property Insurance Corp. for homeowners who could no longer obtain coverage in the private market.

Intended to be an “insurer of last resort”, Citizens Property Insurance has seen an increase of 399,822 policies since the start of 2020 and is on track to have over a million policies by the end of this year. “, said DeSantis.

Among those who asked DeSantis to call the special session was Florida Sen. Jeff Brandes, R-St. Petersburg, who said residents have seen their insurance rates triple in the past two years.

“Floridians are suffering from sky-high rate hikes, and you have the power and the duty to demand commitment from the House and Senate,” Brandes wrote to DeSantis. “This issue is too important for any further delay, and if the leaders of the legislative and executive branches do not act, then I will do everything in my power to protect my neighbors from the crippling effects of rising insurance costs. .”

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Still, a Florida State Department poll taken earlier this month showed a majority of GOP lawmakers didn’t share Brandes’ concerns.

Of the 17 out of 40 senators who responded to the poll, 16 favored a special session with majority Democrats. Only three Republicans were in favor: Brandes, Sen. Aaron Bean of Nassau and Duval counties, and Sen. Ed Hooper of Pasco and Pinellas counties.

In the House poll, 52 of 120 members responded, with 48 Democrats favoring a special session.

Among those not in favor of a special session was Florida House Speaker Chris Sprows, R-Palm Harbor, who said there hadn’t been enough time to see how Senate Bill 76, voted in 2021, would impact insurance rates. The bill limited frivolous lawsuits by changing the way attorneys’ fees are awarded in property insurance disputes and setting a two-year time limit for filing claims.

“The Legislature has made great strides on meaningful property insurance reforms in 2021, and we are already seeing the positive impacts of this work,” Sprows said in a statement this week.

Jessica C. Bell