Florida Moving to Change Laws on Homeowners Insurance

The Florida House moved a bit closer to passing a property insurance bill on Friday when HB 305 was approved by the House Commerce Committee. However, the House bill is significantly different from a bill passed by the Senate. Lawmakers will need to reach some sort of agreement on a final version by the scheduled April 30 end of the legislative session.

Lawmakers claim the changes proposed in the bills are necessary as more and more homeowner insurance companies seek large rate increases or drop customers in certain areas of the state. Citizens Property (Florida’s insurer of last resort) has gained over 120,000 policies in the last year as homeowners have trouble finding coverage in the private market.

The House and Senate bills both hope to reduce insurance litigation by placing restrictions on attorney fees, and to curb fraudulent roof-damage claims. The bills attack the issue in different ways and lawmakers must also consider the fact that many homeowners claim that insurers are not properly paying their claims. At a recent meeting, several Northwest Florida residents and attorneys described problems they are still having getting claims paid after Hurricane Michael.

“The bottom line is consumers who have paid premiums for over 30 years … aren’t being treated right,” said Rep. Joe Geller, in a recent Daytona Beach News Journal article.

The bill sponsor, Bob Rommel, R-Naples, pointed to high litigation rates in Florida. He said in the article that bad insurance companies “need to be sued, but not every insurance company is bad.”

“Part of the problem here in Florida is we need more competition,” Rommel continued in the News Journal article. “We need more carriers.”

What the bill includes

The bill, which runs to 53-pages bill, was approved by the committee in a 14-7 vote. The changes it would make include:

• Prevent contractors from soliciting homeowners to file insurance claims. It would also prohibit offering incentives to homeowners. This is intended to curb roof-damage claims while also seeking to keep public insurance adjusters from offering incentives to inspect for roof damage after a storm.
• Allows for larger annual rate increases for customers of Citizens Property Insurance Corp. Increases are currently are capped at 10 percent.
• Would take steps to limit attorney fees for lawyers who represent homeowners in lawsuits against insurers

The Senate bill (SB 76) also targets attorney fees and goes further when it comes to roof damage claims. The Senate bill creates a reimbursement schedule that allows insurers to sell policies that reduces payments for roofs as they age. If the roof is over 10 years old, insurers would be allowed to reimburse 70 percent of the costs for metal roofs and 40 percent of the costs for concrete-tile and clay-tile roofs.