Gov. Ron DeSantis signs insurance overhaul aimed at stabilizing market

TALLAHASSEE – A property insurance overhaul certain to raise premium costs for many Floridians in coming months, along with tax rebates for residents hit hard by this fall's hurricanes, were signed into law Friday by Gov. Ron DeSantis.

The Republican-controlled Legislature approved the package earlier in the week during a three-day special session called to try to stabilize the insurance industry in Florida.

More than a dozen companies have stopped writing policies in the past two years, including seven that have gone out of business. Floridians are paying triple the average national costs for insurance.

DeSantis went to Fort Myers Beach, battered by September's Hurricane Ian, to sign the legislation. He tried to frame the measure as not just propping-up insurers at the expense of homeowners.

"It's not a question about 'helping' the insurance companies," DeSantis said. "What it's about is creating a market where people are going to want to do business in Florida."

He added, "So the question is, how does that help the consumer? Well, if we do get more people to come and offer policies, you are finally going to have, potentially, choices. And that will allow you, I think, to make the best decisions for you."

Also signed Friday was legislation providing property-tax refunds for homes across 16 Florida counties that sustained major damage from Hurricane Ian and later, Hurricane Nicole.

Homeowners whose properties were uninhabitable for at least 30 days after the storms would qualify for the break.

Insurance, though, was the prime focus of the special session.

No guarantee costs come down

The legislation signed Friday includes no requirements that rates or premiums go down. Instead, the 1.1. million policyholders in cheaper, state-backed Citizens Property Insurance Corp., would now be forced to take private insurance if they get an offer less than 20% higher when they go to renew.

Costly new flood coverage also would be required. First-time Citizens' customers in a flood zone would be required to have flood insurance, beginning in April. Homeowners' renewing Citizens' policies in flood-prone areas would need the added coverage by July.

Even residents of high-rise condominiums covered by Citizens will face the flood requirement. And everyone in Citizens, flood-zone or not, will be forced to have flood insurance, within five years.

The move comes after the number of Citizens' policies has doubled in the past two years. Citizens' policies now are about 30% cheaper statewide than private insurance — even 40% cheaper in Miami-Dade County.

But pushing more homeowners into the private market — paying higher rates — is expected to make Florida more attractive to insurers. It also would reduce the rising risk on all state taxpayers who would have to pay more in the unlikely event that major storm claims erased all of the state-backed Citizens' reserves.

Do Florida homeowners lose again?

"Floridians are losing yet again," said House Democratic Leader Fentrice Driskell of Tampa. "I worry for our neighbors on fixed incomes. How many people are going to lose their homes before this 'trickle down' plan offers any relief? I'm worried about Florida's retirees. This bill wasn't written to help them."

Driskell pointed out that amendments pushed by Democrats aimed at freezing rates, reducing premiums or offering consumer subsidies were all defeated. Democrats had called for changes intended to make insurance, "affordable, available and accountable."

Lawmakers also set aside another $1 billion in taxpayer money as a reinsurance pool insurers could tap to bolster the industry. During a special session in May — also intended to improve the insurance market — lawmakers already set aside $2 billion from the state treasury for reinsurance help.

Another area Democrats disputed in the legislation signed Friday reduces the risk that insurance companies will be sued by homeowners.

Banned by the law are what is known as one-way attorney fees, where insurers pay the legal costs of policyholders who successfully sue in a claims dispute. But critics argued that it furthers the imbalance many called David v. Goliath fights between a homeowner and their insurance company.

Governor Ron DeSantis defends limiting lawsuits

DeSantis, though, defended the provision.

"When you look at so much of the expenses going to litigation, this is going to make a huge, huge difference," the Republican governor said. "You're going to stop a lot of the frivolous litigation, a lot of the scams that happened. We've had a lot of that in this state, for decades."

In another change, the measure bans assignment of benefits, or AOB, where policyholders sign over claims to contractors who then deal directly with insurers.

AOB helps homeowners who need damage repaired and don't want to deal with their insurance companies. But opponents point to abuses of the system that have driven-up costs for insurers.

Chief Financial Officer Jimmy Patronis, a Republican re-elected along with DeSantis in November, was among those advocating for elimination of AOB.

"AOBs are supposed to let policyholders handoff their claims to contractors, so that they can get their cash easier," Patronis told a House committee. "Unfortunately, this tool generates more cost and enriches others, not the homeowner."

John Kennedy is a reporter in the USA TODAY Network's Florida Capital Bureau. He can be reached at [email protected], or on Twitter at @JKennedyReport