On Friday, Republican governor Ron DeSantis signed a comprehensive property insurance measure. Another concern is how much and when it will help to calm the turbulent market.
One of the main objectives of the law is to prevent judicial litigation over claims, which, according to DeSantis, drives up insurance companies’ legal expenses.
Before signing the legislation in Fort Myers, a region devastated by Hurricane Ian in September, DeSantis declared, “This measure reins in the incentive to sue.” This will make a significant, significant effect.
Since 1992, when Hurricane Andrew destroyed Homestead, destroyed several insurance carriers, and made the surviving firms hesitant to sell new policies or renew existing ones there, Florida has struggled to maintain a robust insurance market. As hurricane strength and rainfall severity rise due to climate change, risks for carriers have also been rising.
The new law would establish a $1 billion reinsurance fund, implement measures to discourage frivolous litigation, and compel certain clients to switch from Citizens Property insurance, a state-created insurer of last resort, to a private insurer, even if the cost of the policy is higher. Additionally, stricter deadlines will be imposed throughout the claims process in an effort to prevent homeowners from experiencing coverage delays.
Because of what we accomplished, more individuals in Florida will be willing to develop policy in the near future, according to DeSantis.
In Florida, average yearly premiums have tripled from the national average to insurance than $4,200. According to the Insurance Information Institute, a think tank supported by the insurance industry, 12% of homeowners in the state lack property insurance, compared to 5% nationwide.
In Florida, net underwriting losses for the insurance sector have exceeded $1 billion for the past two years. This year, six insurance companies have declared bankruptcy, and more are leaving the state.
Democrats, though, were against the proposal because they claimed it did little to relieve homeowners’ struggles with significant rate hikes and cancellations.
The proposal will eliminate “one-way” attorney fees for property insurance, which mandate that property insurers pay the policyholders’ legal costs when they prevail in a claim lawsuit while exempting the policyholders from paying the insurers’ legal costs when they lose.
Additionally, it will do away with the state’s regulations governing assignment of benefits, which require property owners to turn over their claims to contractors so they may deal with insurance carriers.
When private insurers provide plans that are up to 20% more costly than Citizens’, the measure would force those with Citizens policies to switch to them. It would also make them pay for flood insurance. The number of Citizens policyholders just surpassed 1 million for the first time in ten years.
DeSantis also authorized the issuance of property tax exemptions to homeowners whose residences Ian rendered unusable. The law also includes funding for restoration.
