Will Florida enact legislation affecting roof coverage and Citizens Insurance eligibility?

A proposal to allow insurance companies to cover only part of the cost to replace damaged older roofs advanced in the state Senate on Wednesday, but time is running out for the House to take action on a needed companion bill.

Also advancing was a proposal to prohibit customers of state-run Citizens Property Insurance Corp. from renewing their policies unless the only competing private market offers cost more than 20% over the cost of the Citizens policy. That proposal is also moving forward in the House and stands a better chance of becoming law.

The two measures, advanced by the Senate Subcommittee on Agriculture, Environment and General Government, are needed to slow growth of Citizens and persuade private market insurers to continue writing new policies in the state, proponents at Wednesday’s hearing said.

Right now, companies are leaving the state at a brisk pace, declining to renew coverage of older homes or homes with roofs over 10 years old. Companies that remain willing to write new or renewing policies are seeking rate increases as high as 40%, or in some cases, even more.

“If you get a 10% increase, which is significant, I tell people, ‘be thankful.’ And I know that sounds silly. But many homeowner premiums are going up, 20%, 30%, or 40%, and in some cases even more. It’s not sustainable,” said Sen. Jim Boyd, a Bradenton-area Republican and sponsor of a broader bill that includes the roof coverage proposal.

The roof proposal is intended to stop roofing contractors from exploiting a requirement that multiperil homeowner policies carry full replacement coverage unless homeowners agree otherwise.

Roofers have created an industry out of soliciting permission to inspect homeowners’ roofs and promising to make their insurers pay for new ones.

Insurers say their costs have been skyrocketing, eroding their ability to turn a profit and forcing many companies to increase rates or pull out of Florida markets altogether.

Boyd’s bill would enable insurers to provide coverage only for the depreciated value of roofs over 10 years old unless damaged in a named hurricane or if the house is declared a total loss.

Sen. Loranne Ausley was the lone vote against the proposal. The Big Bend-area Democrat said she was concerned that low-income and elderly homeowners wouldn’t be able to afford their share of roof replacement costs if they no longer had full coverage.

Another Democrat, Lori Berman of Boynton Beach, raised concerns about requirements by mortgage lenders that borrowers maintain full replacement coverage while repaying loans. Recently, officials of leading mortgage guarantors Fannie Mae and Freddie Mac shared with the South Florida Sun Sentinel language in their loan purchase guidelines requiring full replacement coverage.

But as the final month of the session winds down toward its scheduled March 11 conclusion, prospects for a needed companion measure in the House are dimming, increasing the likelihood that the roof proposal will fail as it did last year.

“I don’t think there’s much appetite on the House

side,” said Paul Handerhan, president of the Fort Lauderdale-based Federal Association for Insurance Reform.

Meanwhile, the Citizens bill, sponsored by Pinellas County-based Sen. Jeff Brandes, is aimed at reducing the number of policies held by the state-run “insurer of last resort.”

In addition to prohibiting renewal of Citizens policies if a private-market insurer

offers competing coverage at up to 20% more than what the Citizens policy costs, the standard would apply whenever a private-market insurer offers to take over a Citizens policy in the middle of a contract term.

Citizens’ policy count has increased from 420,000 in 2019 to about 760,000 now.

Lawmakers worry that if the count swells to more than $1 million, all insurance consumers in Florida

could be subject to special assessments if a catastrophe wipes out Citizens’ $7 billion reserve and renders the company unable to pay all of its claims.