The particular session, which begins Monday, is one more try to stabilize an overpriced and unreliable insurance coverage market in one of many nation’s largest states.
Drone reveals Fort Myers Seashore harm with houses and companies wiped away
Drone captures aerial view of Ft. Myers Seashore destruction from Hurricane Ian
Greg Lovett, Palm Seashore Submit
TALLAHASSEE — The new-look Florida Legislature is coming again to the Capitol to tackle an outdated downside — owners insurance coverage — which has worsened since Hurricane Ian tore via the state in September.
It was simply six months in the past that lawmakers tried to stabilize an overpriced and unreliable insurance coverage market throughout a particular session known as by Gov. Ron DeSantis. This time, new Republican leaders elected to the Home and Senate in November will deal with what continues to be a statewide disaster.
Home Speaker Paul Renner, R-Palm Coast, and Senate President Kathleen Passidomo, R-Naples, now face a fair more durable process.
Earlier repair: DeSantis indicators property insurance coverage reform invoice. Will they work? Who advantages?
The adjustments enacted following Might’s session didn’t spawn a lot enchancment. And since then, Hurricane Ian’s Class 4 harm has already drawn $10.2 billion in insurance coverage claims, with estimates warning the eventual whole will far exceed that, a probably huge risk to the funds of Floridians and their insurers.
“Now we have a protracted, lengthy option to go,” stated Passidomo simply weeks after the storm. Her Naples residence, in-built 1961, was destroyed by flooding from Ian.
Renner and Passidomo made the session official Tuesday, formally calling lawmakers to the Capitol for Dec. 12-16, which overlaps with the primary commonly scheduled committee week upfront of the 2023 legislative session, which begins in March.
DeSantis and Republican lawmakers, who now maintain super-majority management of the Home and Senate, are anticipated once more to deal with efforts to prop-up the trade. Renner has already warned that no matter is authorised, “is not going to end in an in a single day drop in insurance coverage charges.”
Florida owners pay the best premiums within the nation, nearly thrice the nationwide common, in accordance with the Insurance coverage Data Institute, an trade group. These premiums are also climbing at a price of about 33% yearly, in comparison with 9% boosts throughout the remainder of the nation.
However so long as the trade is troubled in Florida, excessive premiums will endure. Greater than a dozen insurance coverage corporations have stopped writing owners insurance policies in Florida this yr, together with a half dozen which have gone out of enterprise altogether.
Trade sure to get what it needs
Lawmakers have taken the strategy that they may give the trade what it needs in a determined bid to cease them from leaving a high-risk state.
The insurance coverage trade bought lawmakers to do a variety of what it wished in Might. And the identical theme is predicted to dominate subsequent week’s session.
Whereas little is understood about why Florida insurers turn out to be troubled — some analysts say poor investments and unhealthy administration are accountable. But the trade blames the fee and monetary danger of lawsuits, and hovering costs for reinsurance — mainly, insurance coverage for insurance coverage corporations — for its woes.
Ian’s insurance coverage damages are estimated to prime $50 billion, making it second solely to 2005’s Hurricane Katrina as the most important insurance coverage loss in U.S. historical past.
Whereas the trade is demanding assist, not everyone seems to be satisfied.
“It’s apparent, the insurance coverage trade needs to maximise revenue and make the most of the political local weather it has proper now, to look anemic, to scare everybody that they may depart Florida and push via laws that can have lasting and long-term results,” stated Amy Boggs, a St. Petersburg lawyer who leads the Florida Justice Affiliation’s property insurance coverage committee.
Related fears of an trade collapse drove the spring session, when lawmakers steered $2 billion in taxpayer cash right into a reinsurance fund to supply extra obtainable funds for corporations.
Different steps included setting apart $150 million for making houses extra hurricane resilient, including a brand new separate insurance coverage deductible for roof harm, which is able to make owners pay extra for roof replacements, and placing new limits on their means to sue insurers.
CAT FUND took a success with Ian
This time round, it’s possible the Legislature will put extra taxpayer cash into the state’s reinsurance pool, the Florida Hurricane Disaster Fund, whose $12.7 billion surplus has taken a success following Ian.
And one other push to discourage home-owner lawsuits towards their insurance coverage corporations is nearly sure.
A report this week by the conservative James Madison Institute echoed trade figures that discovered 80% of all insurance coverage lawsuits nationwide are from Florida, although solely 9% of all insurance coverage claims are filed within the state. JMI additionally says 92% of the $15 billion in insurance coverage payouts since 2013 went to legal professionals and authorized bills, not policyholders.
The variety of lawsuits has eased since limits had been enacted by lawmakers in 2021, state insurance coverage officers acknowledge. However the newest disaster will entice the Legislature to behave once more — presumably by eliminating the requirement that insurance coverage corporations pay the lawyer charges of house owners who win lawsuits.
Eliminating such “one-way lawyer charges,” will make owners shoulder extra of the prices of suing. Critics say that can put owners in a tricky spot even when they win a lawsuit, since a big chunk of their settlement would now go to paying their very own attorneys’ charges.
‘David and Goliath fights’
“Now we have these David and Goliath fights, of a person home-owner combating towards a multi-billion greenback insurance coverage firm and trade, as a result of all of them work in lockstep,” Boggs stated, including that imbalance will worsen with new lawsuit restrictions.
However some specialists say that in a state so hurricane inclined, lowering dangers in different areas like lawsuits is the one option to persuade insurers to remain and write insurance policies.
“You’re seeking to incentivize new firm formation or maintaining the businesses that really are right here,” stated Dr. Chuck Nyce, who teaches insurance coverage and danger administration at Florida State College. “That received’t work till you present corporations and their traders that litigation has been diminished considerably.
“You’ve bought to point out you’ve improved {the marketplace} earlier than you appeal to new corporations to return right here,” he added.
One simple repair, anticipated throughout subsequent week’s session, will probably be a transfer to supply property tax rebates for Florida residents who’ve misplaced their houses in Hurricane Ian.
Lawmakers additionally will possible approve sending {dollars} to counties to make up for these tax losses, to make sure that native providers proceed.
DeSantis already delayed property tax funds within the 26 counties affected by Ian till subsequent June. The Legislature had handed laws earlier this yr offering tax aid for storm-damaged property — however that legislation doesn’t take impact till Jan. 1.
Lawmakers will change that efficient date subsequent week, to provide Floridians a break on their Ian-battered houses.
DeSantis spent a lot of the latter stage of his re-election marketing campaign centered on responding to Hurricane Ian and its aftermath. His Democratic opponent, Charlie Crist, known as DeSantis, “the worst property insurance coverage governor in Florida historical past. Interval.”
DeSantis criticism? Did not stick
However the state’s wide-ranging insurance coverage downside didn’t appear to stay to the Republican governor, who received re-election by a landslide 19% margin. He known as for subsequent week’s session in October, and is extensively seen as directing the session’s agenda.
One other situation certain to get some consideration will probably be Residents Property Insurance coverage, Corp., the state-backed insurer of final resort for Floridians. Residents now has 1.1 million prospects, double what it had simply two years in the past, and the Republican-led Legislature usually bristles on the state being within the insurance coverage enterprise.
Lawmakers might deal with some longer-term steps geared toward prompting owners to depart Residents, as soon as the trade will get higher.
Of their proclamation saying the session, Renner and Passidomo included a lineup of aspirational targets they’ve for subsequent week.
They included enhancing the “monetary stability” of Residents and to “foster the transition” of those insurance policies to the non-public market. Different targets are to “scale back the price of litigation concerning property insurance coverage claims,” serving to with reinsurance, enhancing claims-handling and rising “oversight of property insurance coverage market members.”
A Cupboard member, Chief Monetary Officer Jimmy Patronis, has a collection of proposals centered on ridding the insurance coverage market of fraud, which he blames for a lot of the trade’s issues.
Patronis needs to tighten oversight of public adjusters, ban using Task of Advantages (AOB) protection, which many householders depend on to keep away from battling immediately with their insurers, and making a statewide prosecutor solely centered on insurance coverage fraud.
However a newly elected Democrat, Rep. Hillary Cassel of Dania Seashore, is an lawyer who has labored in property insurance coverage for years. She stated that, too typically, Florida lawmakers put extra of the blame on shoppers than insurers for the state’s issues.
“We’ve by no means addressed claims dealing with, we’ve by no means appeared on the different aspect of this situation,” Cassel stated. “It’s all the time been that these of us who advocate for shoppers are on the chopping block of reform, and we flip a totally blind to how these insurance coverage corporations reply to those catastrophic losses. And I don’t see that altering proper now.”
John Kennedy is a reporter within the USA TODAY Community’s Florida Capital Bureau. He will be reached at jkennedy2@gannett.com, or on Twitter at @JKennedyReport