Lowering Home Insurance Premiums Failed to Pass the Florida Legislature

Recently, three property insurance bills that were designed to stabilize the Florida insurance market and temper skyrocketing homeowner insurance premiums failed to pass the Florida legislature. This was a disappointment to both homeowners and insurers as property insurance premiums continue to head up, in fact, premiums shot up almost 25 percent in the last year. Insurance companies are reporting billions in losses and some insurers are going under or pulling out of the Florida market.

Now what happens?

Unfortunately, what happens next is not clear and the odds are good that premiums will continue to rise. “Now, with no relief in sight … the situation is just going to get worse,” said Mark Friedlander, spokesperson for the Insurance Information Institute, in a recent TC Palm article. 

According to industry experts the bills didn’t pass because state legislators didn’t spend enough time focusing on legislation to help homeowners and the insurance industry, instead focusing on more controversial bills related to the culture wars such as the “Don’t Say Gay” bill that limits what public school teachers can teach as well as an “Anti-Woke” bill that’s goal is to limit or forbid teaching critical race theory in schools.

“There was clearly a priority on certain types of legislation this year, but not on helping the homeowners of Florida survive a very volatile insurance market,” Friedlander said in the TC Palm article. “There was no significant property insurance legislation that passed during session. Very disappointing.”

Here is a brief overview of the bills that died:

SB 1728: This bill was designed to allow insurance companies to pay out roof claims at actual cash value instead of full replacement value. Actual cash value takes depreciation into account when valuing a roof. This bill was designed to limit the losses that insurers are experiencing due to less than honest roofing claims.

SB 186 and SB 468: These bills are designed to slow down policy growth at Citizens Property Insurance Corporation which is the state backed insurer of last resort in Florida. Citizen’s policy count has skyrocketed 40 percent last year as homeowners find it difficult to find coverage in the private market. These bills make it more difficult for vacation home owners (snowbirds) to qualify for Citizens coverage as well as making it easier for Citizens to move policyholders to the private market.

Homeowners can expect rates to continue going up

According to Friedlander in the TC Palm article, insurance premiums are expected to increase 30-40% this year. Insurance companies are expected to continue losing money as well with Friedlander estimating $1.7 billion in underwriting losses for 2021. In addition, two Florida insurance companies have liquidated this year and there are five or six other insurers that are at risk of going under. 

“This is going to have a detrimental effect on the Florida property insurance market,” Friedlander said in the TC Palm article, “For homeowners, for insurers — it’s going to hurt all parties involved.”

The only hope left is that Gov. Ron DeSantis may end up calling a special session this summer to readdress these bills. Two senators, Sen. Jeff Brandes, R-St. Petersburg, and Senate President Wilton Simpson, R-Trible have called for a special session.