DeSantis signs disputed property insurance bill
Gov. Ron DeSantis signed the controversial property insurance reform bill into law on Friday, which critics say will lead to larger rate increases for customers of state-backed Citizens Property Insurance but backers say will cut back on roof-damage claims and lawsuits.
“Unscrupulous actors in the business,” state Sen. Jin Boyd said, were driving up costs. “We’ve got significant penalties and responsibilities for them . ... And it will drive costs down.”
The law, which takes effect July 1, allows larger annual rate increases for customers of Citizens, increasing the capped limit from 10% to 15%.
It also prevents contractors from soliciting homeowners to file insurance claims in order to curb roof damage claims. It also aims to prevent public insurance adjusters from offering incentives to inspect for roof damage.
The law also aims to limit attorney fees lawsuits against insurers and reduces the time limit to file claims from three to two years.
At the bill-signing event Friday in Sarasota, Insurance Commissioner David Altmaier said he has seen changes from private insurers since lawmakers passed the measure.
“Carriers have brought in additional private market capital to re-bolster their balance sheets. We have seen positive news from the reinsurance markets with respect to the direction that reinsurance rates are going, which is a critical component of our marketplace,” Altmaier said. “And we’re seeing private carriers pick up additional policies around the state as carriers reoptimize their portfolios as we head into a very critical hurricane season.”
The bill came as regulators last year signed off on dozens of rate increases of 10% or much more and about 53,000 policyholders statewide were being dropped by three property insurance companies.
Citizens, which was created as an insurer of last resort, saw its policy count grow to 589,041 as of April 30, up from 453,911 a year earlier.
“There is no sugarcoating this,” Sen. Annette Taddeo, D-Miami, said before the bill passed. “It
literally is going to raise the rates.”
State Sen. Gary Farmer called the insurance industry “Chicken Little” and disputed arguments about major financial problems among insurers.
“It’s a manufactured crisis — a completely manufactured crisis,” Farmer said.
Senate sponsor Jim Boyd, R-Bradenton, said it will take time for the bill’s changes to “filter through the system,” and lawmakers will determine if additional “tweaks” are needed to improve the market.
Boyd and other backers of the measure have pointed to problems with litigation costs and questionable, if not fraudulent, claims for such things as roof damage.
“I think we’ve gotten at the cost drivers here, the unscrupulous contractors, the unlicensed contractors,” Boyd, an insurance agent, said. “We’ve got significant penalties and responsibilities for them that will get at the costs. And then some of the claims reporting and some other areas (in the bill) that I think will definitely make a difference, and it will drive costs down.”