TALLAHASSEE – Gov. Ron DeSantis announced Wednesday that he will sign a property insurance package that could result in larger rate hikes for clients of Citizens Property Insurance Corp.
But he added that more will have to be done to make the private insurance industry “stronger”.
“I think we did a lot of good things during the legislative session, one of the things we are going on, I know we have been working on, was property insurance reform, to try to stem it. some of the problems we see in this market, ”DeSantis said, in a video appearance at an Enterprise Florida board meeting. “We want it to be affordable for homeowners. We don’t want it to be something that is just some sort of litigation pot. And that’s really what was happening in Florida. I mean a huge, huge proportion of the money was going towards litigation costs. “
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The heavily negotiated bill (SB 76), which was passed by the Legislature in April, drew criticism from some lawmakers for going too far, while others argued it was not going to go too far. not far enough.
The invoice was one of five sent to the DeSantis office on Wednesday. He has 15 days to act on the invoices.
Banking and Insurance Senate Chairman Jim Boyd, R-Bradenton, said everyone “needs to give a little” in negotiations on the bill, which seeks to strengthen an insurance market that has saw broad rate increases and policies pouring into citizens.
“I think it will help the market rebuild,” Boyd, the bill’s sponsor, said when the measure was approved by the Senate on April 30, the last day of the 60-day session.
The bill came amid a backdrop where regulators last year approved dozens of tariff increases exceeding 10%. In addition, private companies have abandoned tens of thousands of policies due to financial problems. Citizens, which was created as an insurer of last resort, saw its number of policies increase to 589,041 as of April 30, from 453,911 a year earlier.
DeSantis told members of the Enterprise Florida board of directors, who met at Embry-Riddle Aeronautical University in Daytona Beach, that the goal is “manageable bonuses” and a ” stronger private insurance, “where payments go” to real claimants rather than lawyers. “
He added that changes will continue to be a problem in future legislative sessions.
“This is something that we are working on and we are monitoring very closely,” added DeSantis. “But I think the legislature has done, overall, a pretty good job of fixing it. But we will probably have to do more in the future. “
While arguing against the bill in the Senate, Senator Annette Taddeo, D-Miami, complained that the measure “will literally increase rates” for citizen customers.
However, Citizens President and CEO Barry Gilway issued a statement upon approval of the bill, saying the measure offered “significant measures to deal with the rise in insurance rates caused. largely through unnecessary litigation “.
“Citizens are growing at an unsustainable rate, putting our customers and Floridians on the financial hook when a big storm hits the state,” Gilway said in the statement.
Senator Gary Farmer, a Democrat from Lighthouse Point who was one of five senators opposed to the changes, likened the insurance industry to “Chicken Little” and took issue with insurers’ major financial problems.
“It’s a fabricated crisis — a completely fabricated crisis,” Farmer said.
Among the changes in the bill, which will come into force on July 1:
• Allow larger annual rate increases for Citizens customers. These increases are currently capped at 10 percent, but this limit would be gradually increased to 15 percent.
• Prevent contractors from soliciting homeowners to file insurance claims, including offering homeowners incentives. This part of the bill seeks to reduce claims for roof damage. It also aims to prevent public adjusters from offering incentives to inspect roof damage.
• Take steps to try to limit the fees of lawyers who represent owners in lawsuits against insurers. This involves using a formula that would examine how much money is awarded in court judgments and how much money has been offered by insurers to settle claims before lawsuits.
• Reduction of the time limit for filing complaints from three to two years, with an additional year for additional complaints.
The Senate first called for more far-reaching changes to attorney fees and roof damage claims. In part, he proposed creating a “payback schedule” that would have allowed insurers to sell policies offering reduced payments for repair or replacement of roofs over 10 years old. For example, insurers could have reimbursed 70 percent of the costs for metal roofs older than 10 years and 40 percent of the costs for concrete and terracotta tile roofs.
The change would have resulted in increased costs for many homeowners when they suffered roof damage. But the House balked at the idea, which was not included in the final bill.