Enforcing existing laws could solve Florida's property insurance crisis

If you're one of the 14 million homeowners in Florida, chances are that your property insurance rates are increasing at an unprecedented pace, with seemingly no end in sight. With insurers raising rates by as much as 111%, declining coverage or going insolvent, homeowners are paying the cost and bearing the burden of a weakened insurance market that is not their fault.

With no substantive new insurance legislation passed this year and the market in decline, it's easy to understand why some lawmakers and insurers are calling for change or a special legislative session but the reality is that lawmakers have made great strides on insurance reform in recent years.

Just last year, SB 76 and SB 1598 were signed into law, to provide more protection for consumers and discourage fraudulent activity that drives up rates. It was dismaying to see a temporary injunction issued by a federal judge preventing enforcement of one of the key fraud-preventing elements of SB 76 shortly after.

It can take at least 18 months before the market sees the impact from a new bill, but it will take even longer to see the full effect from SB 76 pending an upcoming trial. Instead of putting forth new bills that will likely reduce responsibilities for insurance providers while boosting costs to homeowners, we need to focus on enforcing the strong laws that are already in place.

There are five areas where action can be taken without the need for further legislation, leading to quicker and more impactful changes for homeowners and the insurance market as a whole:

Insufficient Enforcement

Multiple bills have been passed in recent years adding criminal penalties and substantial fines for engaging in unlicensed claims or advertising to engage in activities that require licensing and regulation in Florida such as solicitation and advertising.

A state investigator recently revealed that state attorneys are not always prosecuting fraudulent claims, even when state regulators pursue investigations. This disincentivizes fraud investigators from utilizing their limited resources on building cases against many

bad actors. We are all paying the price with fewer choices and higher premiums. We need to commit to enforcing property insurance laws and giving them appropriate time and resources to make an impact.

Fraudulent Claims

Unlicensed solicitation of claims is fraud and is a third-degree felony that largely goes unpunished in Florida. Requiring restoration companies to be licensed and regulated while encouraging insurance companies not to engage with unlicensed claim solicitors would go a long way on cutting fraud in our state.

Insurance Rates

Policyholders are being unfairly taken advantage of by unlicensed and unregulated bad actors who are artificially driving up claim frequency and severity in Florida, leading to higher rates with less coverage. State attorneys need to understand how fraud is affecting every consumer in Florida, not just the individuals involved in a single claim. Reducing fraud across the state will, in turn, lower premiums. According to a report last year from Florida's Insurance Consumer Advocate, insurance fraud

costs the average family $400-$700 per year in increased premiums.

Florida Hurricane Catastrophe Fund

Increase access to the Florida Hurricane Catastrophe Fund so insurance carriers are not forced to purchase expensive reinsurance from foreign entities and pass those costs down to policyholders. This could have a significant impact on insurance rates.

Litigation on Legitimate Claims

Litigation is incentivized when insurers do not pay what they owe and what is fair on legitimate claims, which only draws out the claims process leaving more and more claims open and unpaid. Insurers should be encouraged not to dispute legitimate claims and to pay what is fairly due to avoid policyholder disputes including litigation.

As advocates for policyholders, the Florida Association of Public Insurance Adjusters seeks a stronger insurance market but not one that comes at the price of less coverage and more costs to homeowners.

With another active hurricane season approaching and the insurance market continuing to decline, it's up to our state attorneys and insurers to act fast and do what they can to cut down on fraud and litigation, and focus on enforcement to help bring the market to an equilibrium.

Chris Cury is president of the Florida Association of Public Insurance Adjusters' board of directors. He is focused on advocacy for insurance consumers.