Florida bill would limit roof claims, attorney fees to corral runaway property insurance rates | Florida
(The Center Square) – Florida’s businesses and 6.2 million homeowners are seeing – or will – see double-digit increases in property insurance premiums as insurers recognize rising reinsurance costs, the “creep of losses” from the 2017-18 hurricanes and coastal flooding Factors indicating the rate of hikes.
Insurers also consistently insist that excessive litigation plays a major role in disrupting the state property insurance market, even after lawmakers passed a reform measure for 2019.
Several bills for 2021 were submitted to the Senate Committee on Banking and Insurance (BI) on Tuesday addressing Florida’s unstable property insurance environment and proposing to cut legal fees to avoid litigation and limit roof damage claims costs.
Senate Act 76Sen. Jim Boyd, R-Bradenton, was filed by its chairman and approved 9: 3. However, the measure faces uncertain prospects when the 60-day legislative period begins on March 2nd.
And that’s scary, Senator Jeff Brandes, R-St. Petersburg, said the panel.
“What we are seeing right now in the state of Florida is a death spiral in the property insurance world,” he said. Relief is needed not only for millions of Florida families and businesses, but also to maintain the financial viability of 60 private individuals, insurers still operating in the state discourage membership in Citizen Insurance, the state-subsidized “insurer.” of last resort ”.
Several factors are driving the rise in Florida property insurance rates.
Florida was abandoned by corporate insurers more than a decade ago. The remainder are mostly thin-capitalized independent companies that are heavily influenced by reinsurance rates. Reinsurance is essentially insurance for insurers.
After a decade without a hurricane, Irma caused $ 17 billion in damage in 2017 and Michael caused $ 12 billion in 2018. Reinsurers are calling for Florida policy renewals to raise interest rates by 25 to 45 percent.
Since December 2019, 55 insurers have increased rates by more than 10 percent and dozen by more than 15 percent, including several between 30 and 40 percent. Further proposed rate hikes are awaiting hearings with the State Public Service Commission (PSC).
Last month, Florida Insurance Commissioner David Altmaier told the committee that excessive litigation continues to result in high costs despite the passage of a benefit allocation reform bill (AOB) in 2019. He displayed Google search results for “Florida umbrella insurance claim” and flipped through pages of inquiries from law firms.
“We really need to spend some time coming up with ideas and ways in which we can possibly tone down these types of activities so that there is no such incentive to file complaints of this type,” said Altmaier.
Boyds SB 76, a result of this “brainstorming,” would reduce legal fees by limiting the “contingent risk multipliers” from three to only “in rare and exceptional circumstances demonstrating that a competent attorney cannot reasonably be retained” two years the deadline for filing claims and requiring policyholders to terminate 60 days prior to filing claims.
The bill would allow insurers to use a “roof reimbursement plan” that takes into account the age and type of roofs. Insurers would only need to fully insure roofs under the age of 10, which means policyholders with older roofs could pay more to repair damage.
Sens. Perry Thurston, D-Fort Lauderdale, and Annette Taddeo, D-Miami, asked numerous questions about SB 76’s potential to injure the most vulnerable by making them pay more for roof damage, and diluted their legal capacity To bring insurers to justice and to court by making the system even more complicated.
“Does something have to be done? Yes it does, ”said Thurston. “Does everything have to fall on our citizens and policyholders? I do not believe that. ”
Boyd, an insurance broker, said SB 76 was a step towards stabilizing property insurance rates.
“Ultimately,” he said, “the goal is to cut costs for consumers.”