Rush job won’t solve property insurance crisis, but it’s a start

In less than 72 hours, the Legislature rushed through a property insurance bill this week. Rush jobs are never perfect, and this bill is very far from perfect.

It likely is based on false assumptions about lawsuits. In typical Tallahassee fashion, it does more to help insurance companies than consumers. It does too little to ease the property insurance crisis. But the right vote was yes.

This legislation does three main things. It provides an additional $2 billion in subsidized reinsurance — insurance for insurance companies. It further limits the ability of policyholders to sue insurers over claims disputes. It creates a new deductible option for roof coverage.

In our view, the Legislature should have doubled that new reinsurance and done more to ensure that customers would benefit if fewer claims go to court. We believe that the roof deductible will tempt policyholders to choose lower costs up front, but will leave them more vulnerable to higher replacement costs from a storm.

‘A very imperfect bill’

The special session was scripted by Gov. Ron DeSantis and Republican leaders. Democrats had to accept what Republicans offered. “The procedure led to a very imperfect bill,” said Sen. Tina Polsky, D-Boca Raton.

Polsky noted that she first opposed last year’s property insurance bill, which legislators passed during the regular session. Debate, however, produced changes that Polsky said “got me to yes.”

Rep. Joe Geller, D-Dania Beach, voiced similar frustration. After Republicans rejected a series of Democratic amendments to help consumers, Geller asked: “Why don’t we legislate anymore?”

True bipartisanship is essentially dead in Tallahassee because Republicans have too much power. They’ve had total control for 24 years, and it shows. In the past two years, as DeSantis has positioned himself for a White House run, partisan issues have mattered more than pocketbook issues.

Politics produced this week’s three-day special session. As companies failed and premiums skyrocketed in an election year, Republicans had to act. But they dithered. Consumers, scrambling for expensive replacement policies after being dropped, had to wait as lawmakers passed DeSantis’ gerrymandered congressional map and blessed his vengeance on Disney, which employs 80,000 people in Florida.

Legislative sloppiness

A serious look at property insurance would have meant thoroughly vetting the industry’s claim that Florida generates 8% of claims nationwide but more than 70% of claims-related lawsuits.

Republicans did not require the state insurance regulator, David Altmeier, to testify about that number. Even some Republicans acknowledged that it may be faulty, since it doesn’t include all states — notably New York. Nor did Republicans compel reinsurance industry experts to testify. That component is critical because insurers must buy enough reinsurance to cover their losses from a bad storm year.

If reinsurance — global and unregulated — costs more, policies will cost more. That’s why Florida offers its own reinsurance pool, known as the Hurricane Catastrophe Fund or “cat” fund.

Private reinsurance firms thus compete with the state. If the state pool lowers costs for insurers, the state should make it larger. Legislators should know much more about the role of reinsurance.

Indeed, this Legislature is flying blind on property insurance, to a great degree. That is the fault of state officials, not Tallahassee’s usual suspects — lawyers and public adjusters, who take over claims from homeowners.

Example: The Tampa Bay Times reported that though Florida requires financial autopsies of failed insurers, no one sees those reports. They could offer valuable guidance. Some reports showed that executives had been draining cash

from insurers. Others moved money among affiliates. Closer examination might reveal that companies failed because of financial mismanagement or worse — not lawsuits.

Then there’s the question of how much those lawsuits pay out. Again, legislators don’t know.

“This has been a constant source of frustration,” House Speaker Chris Sprowls, R-Palm Harbor, said. “It is very difficult for us to do anything on any policy area without information.”

As weak as this bill (SB 2D) was, failing to approve it would have meant more disruption to an insurance market in crisis. Legislators had hoped they could wait and judge the effects of last year’s bill, but political reality and proximity to an election doomed that strategy.

The Legislature and the governor must make insurance an annual bipartisan priority. A new Senate president and House speaker take over after the November election, so the timing is right.

Consider what else happened: Despite pleas from engineering and building trade groups, legislators did nothing through the regular session and three special sessions in response to last year’s horrific collapse of a Surfside condo that killed 98 people.

Because Senate Democrats kept pushing, the Legislature added that issue to the session and approved a bill that the Senate had passed earlier but the House had defeated. Polsky praised it as much better than the insurance bill: “It will help people.”

There’s no promise of lower insurance rates from this session. But Tallahassee could promise to do better going forward. That would be the right kind of rush job.

The Sun Sentinel Editorial Board consists of Editorial Page Editor Steve Bousquet, Deputy Editorial Page Editor Dan Sweeney, and Editor-in-Chief Julie Anderson. Editorials are the opinion of the Board and written by one of its members or a designee. To contact us, email at letters@sun-sentinel.com.