Florida lawmakers pass property insurance overhaul – CBS Miami
TALLAHASSEE (CBSMiami / NSF) – Struggling with problems in the home insurance market, Florida lawmakers on Friday passed a plan that could result in larger rate hikes for clients of Citizens Property Insurance Corp. lawsuits.
But the plan was not as ambitious as a Senate proposal that would have effectively passed more costs to many homeowners when they suffer roof damage.
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Banking and Insurance Senate Speaker Jim Boyd R-Bradenton said everyone “has to give a little” in negotiations on the bill (SB 76).
But he said it would strengthen an insurance market that has seen large rate hikes and policies pouring into citizens’ property insurance.
“I believe this will help the market to rebuild itself,” said Boyd, the sponsor of the bill.
The bill, however, drew criticism from some lawmakers who said it went too far – and others who said it did not go far enough. Senator Annette Taddeo, D-Miami, complained about the prospect of increased rate hikes for Citizen customers.
âThere is no sugar coating,â Taddeo said. “It will literally increase the prices.”
But Senator Jeff Brandes, R-St. Petersburg said the bill would not solve the financial problems in the insurance market.
âWe are on an unsustainable trajectory,â Brandes said. “This bill is 40% of what it was supposed to be.”
The Senate voted 35-5 to approve the bill, and the House followed with a 75-41 vote. Bill now goes to Governor Ron DeSantis.
The bill came against the backdrop of regulators last year signing dozens of rate increases exceeding 10%.
In addition, as the insurance market has tightened, citizens have won over 120,000 policies in the past year.
The insurance industry reports issues such as court costs and questionable or even fraudulent roof damage claims.
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Additionally, officials say Citizens, which was created as an insurer of last resort, often charges lower premiums than private insurers.
Lawmakers such as Brandes say the growing number of citizens poses a major financial risk to the state. But the issue of raising citizens’ rates is politically sensitive because homeowners in some areas have little or no other coverage options.
The bill would make a series of changes. They include:
– Allow larger annual rate increases for Citizens customers. These increases are currently capped at 10 percent, but this limit would be gradually increased to 15 percent.
– Prevent contractors from soliciting homeowners to file insurance claims, including offering homeowners incentives. This part of the bill seeks to curb roof damage claims. It also aims to prevent public adjusters from offering incentives to inspect roofs.
– Take measures to try to limit the fees of lawyers who represent owners in lawsuits against insurers. This involves the use of a formula that would examine how much money is awarded in court judgments and how much money has been offered by insurers to settle claims before lawsuits.
– Reduce the time limit for filing complaints from three years to two years, with an additional year for additional complaints.
The Senate initially called for more far-reaching changes to attorney fees and roof damage claims. In part, he proposed creating a âpayback scheduleâ that would have allowed insurers to sell policies with reduced payments for repair or replacement of roofs over 10 years old. For example, insurers could have reimbursed 70% of the costs of metal roofs over 10 years old and 40% of the costs of concrete and clay tile roofs.
The change would have resulted in passing more costs on to many homeowners when they suffered roof damage. But the House balked at the idea, which was not included in the final bill.
Like Brandes, Sen. Doug Broxson of R-Gulf Breeze expressed concern that lawmakers continue to “hit the ball on the road without making major changes.”
But Senator Gary Farmer, D-Lighthouse Point, likened the insurance industry to “Chicken Little” and took issue with arguments about major financial problems among insurers.
âIt’s a fabricated crisis – a completely fabricated crisis,â Farmer said.
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