TALLAHASSEE, Fla. (AP) — Florida Governor Ron DeSantis signed legislation Thursday that expands property insurance legislation that creates a $2 billion reinsurance fund and rewrites rules on denials of coverage and attorneys’ fees, in a move to stabilize rising costs and insurers’ losses. .
DeSantis, a Republican, announced the bill’s signing in a statement that called the package “the most significant reforms in Florida’s homeowners insurance market in a generation.”
The signatures mark the end of a special insurance legislative session where lawmakers in the GOP-controlled state House passed sweeping measures in three days, with little public input or expert analysis. The Legislature failed to pass insurance reforms earlier this year during its regular meeting period, which was dominated by intense partisan fights over bills on abortion, sexual orientation and gender identity.
In the state chamber, the bills largely moved with bipartisan support, with lawmakers describing the package as a significant first step in repairing a market plagued by insurer insolvencies, policy cancellations and rising insurance costs.
The main point of criticism from the Democrats, the minority party, was that the legislation does not do enough to provide immediate financial relief to homeowners whose premiums have increased. Republicans acknowledged that it would take 12 to 18 months before prices could fall.
“I don’t know what else I can do to lower my insurance,” said Roni Sterin, a real estate agent in Broward County, who said her insurance costs unexpectedly increased about $1,500 recently. “No one is helping us.”
The insurance industry has had two years of underwriting losses exceeding $1 billion each year and several insurance companies have become insolvent, required mid-term cancellations, are in liquidation, or have stopped underwriting new business since 2021, the governor said in his proclamation calling on lawmakers to return to the Capitol. The loss of private insurers has driven property owners to Citizens Property Insurance, a state-owned public insurer meant to be a last resort.
The new laws would create the $2 billion Reinsurance program to help policyholders get insurers to buy insurance to help insulate them from risk. Insurers would have to reduce policyholder rates to access the state reinsurance fund. It also offers grants of up to $10,000 to equip homes so they are less vulnerable to hurricane damage, if the homes meet certain criteria.
The law prohibits insurers from automatically denying coverage based on the age of the roof if it is less than 15 years old. Homeowners with roofs 15 years or older would be allowed to get an inspection before being denied coverage by insurers.
If an inspection shows that a roof has at least five years of useful life left, insurers cannot refuse to issue a policy based solely on the age of the roof. If a roof is more than 25% damaged but already meets the state’s 2007 building code, it would only have to be repaired rather than replaced under a building code exemption that the proposed legislation creates.
The legislation also seeks to cap various attorney fees in insurance-related cases, which insurers blame for much of the rate increases for policyholders. Supporters of the legislative package have frequently pointed out that Florida accounted for 9% of all insurance claims filed nationally, but almost 80% of all property insurance claims.
The package also includes a measure to require all condominiums over three stories statewide to have regular inspections for their structural integrity, a proposal that came in response to the Surfside condominium collapse that killed 98 people nearly a year ago.
The bills would allow for more state oversight so regulators can spot trends, analyze reasons and try to prevent future insurer failures.
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