A chance to help homeowners, if state Legislature does its job
A special session on Florida’s property insurance crisis would have been a good idea last year.
But Gov. DeSantis and Republican lawmakers had other priorities.
They targeted LGBTQ+youth and election fraud that doesn’t exist in Florida. They outlawed so-called “sanctuary cities” that don’t exist in Florida.
A special session on Florida’s property insurance crisis still would have been a good idea four months ago during this year’s legislative session, or even one month ago in the last special session.
But Gov. DeSantis and Republicans had other priorities.
They targeted LGBTQ youth — again. They restricted how schools and companies talk about race. They made it easier for parents to challenge school textbooks. They punished The Walt Disney Company for belatedly opposing the “don’t say gay” bill. They restricted abortion rights. Legislators capitulated to the governor and approved his gerrymandered map for congressional districts.
A worsening crisis
Meanwhile, the insurance crisis worsened. Sen. Jeff Brandes, R-St. Petersburg, basically shamed his GOP colleagues into calling a special session. It begins Monday and is supposed to last through Friday.
So now, up against a key June 1 deadline for the property insurance industry, DeSantis and the Republicans finally say they want to address a real issue that, directly and indirectly, affects every Floridian and the state’s economy.
DeSantis and GOP legislative leaders had promised that the session’s main bills would be filed by Thursday. As of Friday afternoon, however, no major bills were yet available for public review.
“It is legislative malpractice to deal with insurance this way,” said state Sen. Tina Polsky, D-Boca Raton. No topic, Polsky said, draws more questions and comments when she speaks to community groups.
Polsky said the Legislature should have devoted its week-long committee meetings — held once a month — to insurance a long time ago. Legislators should have heard testimony “from all stakeholders,” not just the insurance industry. “This is far too complicated an issue,” Polsky said, “for it to be rushed.”
Legislators might have thought they were done with property insurance after last year. Two bills sought to address the claims fraud that companies blame for rising rates. House Speaker Chris Sprowls, R-Palm Harbor, killed a follow-up bill this year because he wanted more time for the 2021 legislation to take effect.
But just since January, three insurers have gone under. A fourth, Sunrise-based FedNat, was downgraded and had to drop 68,000 policies on the eve of hurricane season.
So even DeSantis had to stand down from culture wars and try to pass serious legislation. It will be a heavy lift for a governor and a party that have rammed their controversial bills through the Legislature without caring what others think.
What’s at stake
Insurance, though, is serious legislation. Here’s how it shapes up:
Companies believe that Florida allows too many fraudulent claims. They cite statistics that the state has 8% of claims each year but 70% of claims-related lawsuits. Take the lawyers out of it, the carriers say, and things will be fine.
Lawyers and public adjusters — whom homeowners can appoint to negotiate their claims — respond that they get involved only when insurers refuse to pay legitimate claims.
Then there’s reinsurance, which insurance companies buy to cover losses from major storm or multiple storms in one year. It’s like bookies laying off bets.
Those contract renewals come on June 1. Because DeSantis and the Legislature delayed so long, insurers have no idea what to expect and how to price it.
Unlike insurance in Florida, reinsurance operates on an unregulated global market. Hurricane Ida hitting Louisiana and winter storms hitting Texas last year caused losses that drove up the cost of reinsurance and the price of policies in Florida.
For 30 years, since Hurricane Andrew hit southern Miami-Dade County, Florida has based property insurance decisions on what the industry wants. To a degree, it’s made sense. More companies would mean a more competitive market.
But it’s past time to stop pretending that Florida ever can have a normal property insurance market. This is especially true given the effects of climate change.
Florida, however, wants a functioning real estate market. Prohibitively expense insurance could disrupt that.
What to do
So we offer these suggestions:
■ Whatever happens this week, start working on follow-up legislation after the election. Take the long look that didn’t happen in 2021 and 2022, and include deep-seated flaws in Florida’s insurance regulation that let companies hide profit and over-estimate losses.
■ Consider greatly increasing the reinsurance offered by the Florida Hurricane Catastrophe Fund. Cut out the global companies as much as possible.
■ Consider requiring insurers in Florida to write all lines of businesses, not just the lucrative auto policies. Floridians pay the second-highest share of their income toward auto insurance compared to residents of other states.
■ Whatever actions the Legislature takes toward reducing fraud, require companies to pass those savings on to customers. Restrict Florida-only subsidiaries of national insurance companies from passing on any of the savings to their parent corporations.
DeSantis said, “We’re not going to accept anything less than a very significant package for the people of Florida.” But a key DeSantis ally, insurance industry lobbyist Fred Karlinsky, told reporters this week that rates won’t be coming down whatever Tallahassee does.
DeSantis, who is running an unacknowledged campaign for president in 2024, has been showing off for Republican culture warriors nationwide. On property insurance, he must put that aside and act like the governor of a state in crisis.
The Orlando Sentinel Editorial Board includes Editor-in-Chief Julie Anderson., Opinion Editor Krys Fluker, Viewpoints Editor Jay Reddick and El Sentinel Editor Jennifer Marcial Ocasio. The Sun Sentinel Editorial Board consists of Editorial Page Editor Steve Bousquet, Deputy Editorial Page Editor Dan Sweeney, and Anderson. Email us at insight@Orlandosentinel.com.