Beleaguered homeowners shouldn’t expect quick relief on insurance rates, lawmakers say

Floridians shouldn’t expect any immediate relief from their rising homeowners insurance premiums even if state lawmakers pass wide-ranging legislation this week to address the crisis.

That was the frank acknowledgment of the state’s Republican leaders, who admitted that years of failure to take meaningful action has created an emergency for the state.

“I know homeowners are feeling the pain right now,” said Sen. Jim Boyd, R-Bradenton, an insurance agent who said his own homeowners insurance policy went up 35% last year. “Right now in terms of rate relief, there’s no immediate impact.”

Instead, he said it could be 18 months before homeowners’ rates begin to fall, when the various changes lawmakers are proposing begin to stop the tide of litigation and fraud that insurance companies and lawmakers say is causing double-digit rate increases and the failure of numerous companies.

That news underscored lawmakers’ lukewarm reception on Monday to the legislation proposed by Republican legislative leaders and Gov. Ron DeSantis, who promised a “very significant package” of reforms last week.

“This whole 18-month thing is unacceptable,” said Sen. Jason Pizzo, D-Miami. “Where’s the beef for our constituents?”

What legislation would do

Boyd conceded it was a “tough bill,” but the goal is to stabilize the insurance market. The legislation, Senate Bill 2-B, passed a Senate committee overwhelmingly on Monday. It would:

▪ Protect homeowners from losing, or being denied, coverage solely for having an older roof.

▪ Place limits on attorneys’ fees on lawsuits against insurance companies.

▪ Create a new $2 billion fund to help insurers buy reinsurance for storm season.

▪ Allow Floridians to receive up to $10,000 for home-hardening improvements on their homesteaded properties valued at $500,000 or less in the state’s wind-borne debris region in the southern half of the state and the western corner of the Panhandle.

The most immediate relief could come for homeowners grappling with the fallout from the insurance crisis. As insurers refuse to renew or sign policies on homes with older roofs, it has left homeowners in a lurch, unable to find insurance without spending tens of thousands of dollars on a new roof.

Under the bill, companies would be blocked from denying coverage solely because of a roof’s age if the roof is less than 15 years old. For roofs 15 years and older, insurers would have to allow homeowners to have an inspection of the roof’s condition before refusing coverage. If the inspection shows the roof has five or more years of useful life left, the insurance company could not reject coverage simply because of age.

Not all legislators are in favor

That idea didn’t have unanimous support, though. Sen. Jeff Brandes, R-St. Petersburg, said it could be devastating for insurance companies. Canceling policies on riskier homes is one of the only tools they have to save money, he said, and he proposed amending the bill to require only the state-run Citizens Property Insurance adopt the restrictions instead.

“You are making them walk into the lion’s den,” Brandes said of private insurers. “At least send a government official into the lion’s den first and get chewed up.”

The issues facing Florida’s insurance industry have been brewing for years. Rampant litigation has widely been cited as a primary driver for high rates. Between 2016 and 2019, Florida accounted for somewhere between 7.75% and 16% of the nation’s homeowners’ claims but between 64% and 76% of the nation’s litigated homeowners’ claims.

Lawmakers expressed frustration that the state has no more substantive data on the crisis. They passed a law last year requiring the Office of Insurance Regulation to collect data from insurers about lawsuits, but the data hasn’t been collected and the report isn’t due until Jan. 1, 2023.

Much of Monday’s public testimony consisted of finger-pointing between the insurance industry (and allied business groups) and the trial lawyers (and their allies) who sue them — powerful interest groups whose sway in Tallahassee has contributed to lawmakers’ inaction over the years.

Richie Kidwell, president of the Restoration Association of Florida, which represents contractors, said that lawmakers have consistently blamed different types of litigation for rising insurance rates. Kidwell and his company, the Kidwell Group, have been plaintiffs in nearly 5,000 lawsuits against insurance companies since 2016, according to state data.

“Every year the boogeyman has changed,” he said. “And there’s never been any legislation that has forced those rates either to freeze or go down, until today.”