Florida Senate passes property insurance overhaul

Dec 13, 2022, 12:40 AM | Updated: 2:57 pm
Sen. Jim Boyd, R-Bradenton gestures as he answers a question during the Committee on Banking and In...

Sen. Jim Boyd, R-Bradenton gestures as he answers a question during the Committee on Banking and Insurance meeting Monday, Dec. 12, 2022 at the Capitol in Tallahassee, Fla. Florida lawmakers are meeting to consider ways to shore up the state's struggling home insurance market in the year's second special session devoted to the topic. (AP Photo/Phil Sears)

(AP Photo/Phil Sears)

TALLAHASSEE, Fla. (AP) — The Florida Senate on Tuesday approved sweeping legislation that would overhaul the state’s property insurance system, which has struggled due to insolvencies, high costs and major storms.

The bill would create a $1 billion reinsurance fund, reduce litigation costs and compel some customers to leave a state-created insurer. It also would force insurers to respond more promptly to claims and increase state oversight of insurers’ conduct following hurricanes.

The Republican proposal was put forth during the GOP-led Legislature’s second special session this year aimed at stabilizing the state’s property insurance market. The state House is expected to give the measure final passage this week.

Florida has struggled to control rising property insurance costs and hold onto insurers in a market where natural disasters weigh heavily on the cost of business. The session comes after Hurricane Ian smashed into the southwest coast in late September and caused an estimated $40 billion to $70 billion in insured losses.

The bill, which builds on insurance legislation passed in May, is not expected to immediately lower rates for policyholders, which has drawn criticism from Democrats. Backers of the bill argue that it is meant to stabilize the market, which then could lower rates in the future.

“As we look forward, and as these reforms take place and work their way through the ratemaking process, I absolutely believe it will drive their costs down,” said Republican state Sen. Jim Boyd, who sponsored the bill. “While it might not happen today, I absolutely believe we will have rate relief as we move forward in the future.”

Average annual premiums have risen to more than $4,200 in Florida, which is triple the national average. About 12% of homeowners in the state don’t have property insurance, compared to the national average of 5%, according to the Insurance Information Institute, a research organization funded by the insurance industry.

“Homeowners in Florida are being crushed right now by the cost of housing and insurance costs are a major part of that,” said Democratic state Sen. Darryl Rouson. “Any action that does not address the instability and costs to the consumer and does not provide meaningful near term relief for policyholders, I believe falls short of our goals.”

Senate Democrats filed a round of amendments to the bill and peppered Boyd with detailed questions about the state of the insurance market, insurance litigation and various elements of the complex proposal.

Republicans rejected the Democratic amendments following several hours of debate and eventually approved the legislation.

The insurance industry has seen two straight years of net underwriting losses exceeding $1 billion each year in Florida. Six insurers have gone insolvent this year, while others are leaving the state.

The insurance industry says litigation is partly to blame. Loopholes in Florida law, including fee multipliers that allow attorneys to collect higher fees for property insurance cases, have made Florida an excessively litigious state, a spokesman for the Insurance Information Institute has said.

The Florida Office of Insurance Regulation has said the state accounts for 76% of the nation’s homeowners’ insurance lawsuits but just 9% of all homeowners insurance claims.

The legislation would remove “one-way” attorney fees for property insurance, which require property insurers to pay the attorney fees of policyholders who successfully sue over claims, while shielding policyholders from paying insurers’ attorney fees when they lose.

Attorneys groups have argued that the insurance industry is at fault for refusing to pay out claims and that policyholders sue as a last resort. The alternative, arbitration, tilts in favor of insurance companies, they say.

“Is the answer punishing the people of Florida? They’re not going to have any chance to oppose a decision an insurance company makes unless they’re independently wealthy,” Ron Haynes, a Tampa attorney speaking for the Florida Justice Assocation, told the House Appropriations Committee. “Insurance should be a blanket of coverage and not a blanket that smothers you.”

The bill would provide $1 billion in taxpayer funds for a program to provide carriers with hurricane reinsurance, which is coverage bought to help ensure they can pay out claims. It would offer “reasonable” rates in a market where companies have complained about rising costs.

The proposal will also speed up the claims process and eliminate the state’s assignment of benefits laws, in which property owners sign over their claims to contractors who then handle proceedings with insurance companies.

“This is groundbreaking legislation. In fact, it is the strongest insurance reform package we have ever seen proposed in Florida,” said Mark Friedlander, a spokesman for the Insurance Information Institute. He called litigation abuse and assignment of benefits abuse the “root causes of Florida’s property insurance crisis.”

The unstable insurance environment in Florida has pushed homeowners unable to get private coverage to the state’s public insurer of last resort, Citizens Property Insurance, which this summer topped 1 million policies for the first time in almost a decade.

The bill would force people with Citizens policies to pay for flood insurance and require moves to private insurers if they offer a policy up to 20% more expensive than Citizens.

“We have an overall bill here that in my opinion is absolutely historic,” said Barry Gilway, Citizens president, CEO and executive director. “It is the start of a major change in the property insurance market in Florida. It will draw capital back into the Florida marketplace. It won’t happen overnight, but it will happen a lot sooner than people think.”

Lawmakers this week are also expected to pass separate bills that would provide property tax relief to people whose homes and business were made uninhabitable by Ian and give 50% refunds to commuters who pay more than 35 highway tolls in a month with a transponder.


Associated Press writer Curt Anderson contributed from St. Petersburg, Florida.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


Large advertisements adorn buildings and electronic billboards leading up to the NFL Super Bowl LVI...
Associated Press

Fox sells out Super Bowl ads: crypto out, alcohol in

NEW YORK (AP) — Fox says it has sold out all of its Super Bowl LVII ad space as of the end of January. The big game between the Kansas City Chiefs and the Philadelphia Eagles takes place on Sunday. The Super Bowl is advertising’s biggest stage, with advertisers jockeying to get their products in […]
1 day ago
FILE - In this July 12, 2017 file photo, an issue of the National Enquirer featuring President Dona...
Associated Press

National Enquirer, ensnared in “catch-and-kill” is sold

The National Enquirer, the scandal-plagued tabloid that engaged in “catch-and-kill” practices to bury stories about Donald Trump during his presidential campaign, has been sold. VVIP is also buying the National Examiner and Globe from magazine publisher a360 Media in an all-cash deal, though exact financial terms were not disclosed. In December 2018 the parent company […]
1 day ago
Patriot missile launchers acquired from the U.S. last year are seen deployed in Warsaw, Poland, Mon...
Associated Press

Poland deploys Patriot batteries to capital city, Warsaw

WARSAW, Poland (AP) — Patriot missile batteries that Poland acquired from the U.S. last year have been deployed to the country’s capital Warsaw as part of military exercise, according to Poland’s defense ministry. Poland is taking additional steps to strengthen its defensive capabilities as Russia’s war in neighboring Ukraine enters its second year later this […]
1 day ago
FILE - People visit the Magic Kingdom Park at Walt Disney World Resort in Lake Buena Vista, Florida...
Associated Press

Florida to begin session on Disney district, migrant flights

TALLAHASSEE, Fla. (AP) — Florida lawmakers will meet Monday to complete a state takeover of Walt Disney World’s self-governing district and expand a migrant relocation program, key conservative priorities of Republican Gov. Ron DeSantis ahead of his expected White House run. Republican leaders of the statehouse, in coordination with DeSantis, have ordered the Legislature to […]
1 day ago
Associated Press

Media watchdog urges release of journalist detained in Kabul

PARIS (AP) — Media watchdog Reporters Without Borders along with 14 French media outlets and production companies on Monday called on Afghanistan’s Taliban rulers to release a journalist imprisoned for a month in Kabul. In a joint statement, RSF and French media said journalist Mortaza Behboudi, with dual French and Afghan citizenship, was arrested on […]
1 day ago
Associated Press

Liz Weston: ‘Bridge’ your way to Social Security

Delaying the start of Social Security benefits is a powerful way for retirees to cope with inflation, survive bad investment markets and reduce the risk they’ll run short of money. The advantages of waiting are so great that financial planners often recommend their clients tap other savings, such as retirement funds, to help them delay […]
1 day ago

Sponsored Articles

safety from crime...

As crime increases, our safety measures must too

It's easy to be accused of fearmongering regarding crime, but Seattle residents might have good reason to be concerned for their safety.
Comcast Ready for Business Fund...
Ilona Lohrey | President and CEO, GSBA

GSBA is closing the disparity gap with Ready for Business Fund

GSBA, Comcast, and other partners are working to address disparities in access to financial resources with the Ready for Business fund.

Medicare open enrollment is here and SHIBA can help!

The SHIBA program – part of the Office of the Insurance Commissioner – is ready to help with your Medicare open enrollment decisions.
Lake Washington Windows...

Choosing Best Windows for Your Home

Lake Washington Windows and Doors is a local window dealer offering the exclusive Leak Armor installation.
Anacortes Christmas Tree...

Come one, come all! Food, Drink, and Coastal Christmas – Anacortes has it all!

Come celebrate Anacortes’ 11th annual Bier on the Pier! Bier on the Pier takes place on October 7th and 8th and features local ciders, food trucks and live music - not to mention the beautiful views of the Guemes Channel and backdrop of downtown Anacortes.
Swedish Cyberknife Treatment...

The revolutionary treatment of Swedish CyberKnife provides better quality of life for majority of patients

There are a wide variety of treatments options available for men with prostate cancer. One of the most technologically advanced treatment options in the Pacific Northwest is Stereotactic Body Radiation Therapy using the CyberKnife platform at Swedish Medical Center.
Florida Senate passes property insurance overhaul