EDITORIAL: Homeowners' premiums still issue for lawmakers

OUR POSITION: The Legislature tried to stem the soaring costs of homeowners insurance last year, but its new laws falls short. Lawmakers are trying again with better results, we hope.

If your homeowners insurance bill is causing you headaches, you're not alone.

The insurance market is a source of pain for many Florida homeowners and the agencies are once again calling on lawmakers in Tallahassee to fix the problem. The problems we addressed in an editorial last year continue to push rates higher and without help from the Legislature, again, there is no easing of those costs in sight.

There continue to be two big issues, even after lawmakers took a stab at fixing things in 2021.

Unnecessary, or inflated, home repairs that go to litigation have been one of the biggest complaints from insurers. And the low cost premiums offered by Citizens Insurance, which is supposed to be the insurer of last resort, were another issue even after the state allowed Citizens to increase its rates.

In 2020, Florida insurance companies lost money — more than $1.5 billion despite no major hurricanes hitting the state.

Part of the problem was roofing contractors going door to door telling people they see some damage and they can get them a new roof.

Key Agency's David Dignam explained to us last year how the homeowner who is being courted can agree to an assignment of benefits (which gives the contractor the right to negotiate for them). "An adjuster comes out to reference the damage and the roofers partner with a law firm that knows the system and how the litigation works. They tell the insurance company they want $30,000 for a new roof knowing it will cost $60,000 to go through litigation. So the insurance company caves in and pays $30,000," Dignam said in outlining how the process works and costs insurance companies.

The Legislature passed a bill with the aim of limiting the amount of money attorneys can get for representing homeowners in lawsuits against insurers. It also sought to stop contractors from soliciting homeowners to file claims.

The bill also allowed Citizens to raise rates as much as 15%. That would make consumers think twice before trying to switch companies to save money.

The Legislature is back at it this year with the Senate Banking and Insurance Committee and the House Insurance & Banking Subcommittee approving bills (SB 1728 and HB 1307) that would siphon policies from Citizens Property Insurance to private insurers.

To fight the continuing issue of roof replacements, the Senate bill allows insurers to sell policies that would not offer replacement coverage for roofs that are at least 10 years old. Instead, the policies would cover only the damage and actual cash values of roofs, with the exception of those damaged in a hurricane that could then be replaced.

Some controversy over the fear the bill would hurt low-income residents in older homes more than others is a sticking point.

Homeowners flooding Citizens with new policies is the other issue being looked at. A month ago, Citizens had 759,305 policies, up more than 200,000 from a year ago.

To ease the crunch, lawmakers are considering not allowing homeowners to do business with Citizens unless the private insurer's rates are more than 20% higher.

Tommy Gregory, R-Sarasota, is on record saying the goal of the bill is to level the playing field and push more insurance policies to the private market.

What the outcome will be is anyone's guess, but we're pleased the Legislature is acknowledging the problem. A solution is needed, especially with flood insurance rates expected to push premiums higher.