Homeowners insurance changes head to House floor

Changes to homeowners’ property insurance go to the house floor after gaining support in a final committee stop.

The House of Representatives Trade Committee developed laws (HB 305) with the aim of slowing down a rapid rise in interest rates.

In the last station, Rep. Bob Rommel, the bill sponsor, introduced two major changes. The new language enables providers to offer roof insurance that does not cover the full replacement costs, but instead covers the depreciated present value of the roof. The amended bill would also restrict when courts can apply a multiplier to attorney fees.

Rommel said any reform aims to stop increases in the premiums billed to consumers.

“Prices are increasing by 25 to 30% annually with no end in sight, and if we do nothing, prices will double in two years,” said the Republican from Naples.

These provisions are already included in the accompanying invoice (SB 76) passed from the Senate Earlier this month, however, a committee representative on the Insurance and Banking Subcommittee removed the language about legal fees from the House of Representatives version.

However, Rommel said it was important to address the matter because of the high proportion of the cost that lawyers have to pay as opposed to clients. He said around $ 15 billion in insurance claims had been paid out in Florida since 2013, but 71% of that went to lawyers.

Unlike the Senate draft, Rommel’s law allows Citizen property insurance, the state-administered insurer of last resort, to raise tariffs by more than 10% per year. It gradually increases the allowable increases by 1% each year until the insurer can increase the rates by up to 15% by 2026. That’s about half the increases currently being made with private insurers.

Rommel said the state insurer is taking in too many new customers, thousands a week. Legislation will ensure that citizens can increase their tariffs appropriately to cope with increased costs and to keep pace with the market.

representative Joseph Geller, a Democrat from Aventura, tried on the committee to amend the bill to require insurance tariffs to be frozen for the next six months.

Several survivors of the hurricane Michael testifies that the bill addresses the wrong issues. Joe Busby, a homeowner from Marianna, said he had struggled with State Farm Insurance over storm damage to his home for two and a half years. After 36 years as a customer, he said the company had undervalued the damage done to his home. He is now threatened with the foreclosure of a house in which he has not been able to live for more than two years.

He suggested that the problem in the market is not due to consumers suing suppliers, but rather to suppliers failing to comply with the obligations in the directive.

“I’ve testified to this six or seven times and I don’t see anything that will help the consumer with this bill,” he said.

Lawyers, many of whom are familiar with representing consumers in court, said the reforms were counterproductive. Larry Bache, an insurance claims attorney with Merlin Law Group said omitting multiplier claims will encourage attorneys to negotiate in bad faith in order to prolong the settlement process.

Hillary Kassel, A lawyer at Cassel and Cassel, speaking as a member of the Florida Policy Holders Collective, also spoke out against the bill. She has moved to run in House District 99.

“The purpose of this legislation is to demotivate the bad actors,” she said. “I am submitting this legislation to you, which enables insurance companies to reject claims from the outset.”

She noted that many people, including Busby, have been denied claims worth more than $ 100,000, but this bill will allow settlement negotiations and coverage to be established by insurance companies.

“This will result in a high cost of ownership and will not discourage the bad actors,” she said.

The Democrats on the Trade Committee appeared to agree with these concerns. “The problem is that the imbalance is in favor of the insurance company and we continue to tip it,” said Geller.

However, Rommel said the law still allows five years to sue in cases where insurance companies are genuinely mistreating consumers.

However, he said court costs remained the largest contributor to rising insurance rates, pointing to a case where a homeowner was awarded $ 35,000 in a court hearing and attorneys made $ 756,000 from the same case.

“We can see it,” he said. “The money doesn’t go to the customers. It goes to lawyers. “

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