Homeowners insurance – Reform bills fail to pass state Legislature

"There was clearly a priority on certain types of legislation this year, but not on helping the homeowners of Florida survive a very volatile insurance market. There was no significant property insurance legislation that passed during session. Very disappointing."

Mark Friedlander

Spokesperson for the Insurance Information Institute

Three property insurance bills intended to alleviate skyrocketing premiums statewide failed to pass the 2022 Florida legislative session that ended Friday.

This comes at a time when homeowners and insurance companies alike are desperately seeking remedy, as property insurance premiums are up nearly 25% in the last year and businesses report billions in underwriting losses.

What do industry professionals predict will happen now?

"Now, with no relief in sight ... the situation is just going to get worse," said Mark Friedlander, spokesperson for the Insurance Information Institute, a nonpartisan association that provides insurance education and research.

Why didn't these bills pass?

A Republican proposal, SB 1728, intended to allow insurers to pay roof claims based on actual cash value, not full replacement value. It was designed to limit losses for property insurers.

Two other proposals, SB 186 and SB 468, aimed to offset the growing demand in Citizens Property Insurance Corporation claims.

The state government agency, which covers those unable to find affordable policies in the private market, saw a 40% demand increase last year, spokesperson Michael Peltier told TCPalm last month.

These bills primarily focused on making it harder for seasonal Florida residents to qualify for Citizens' coverage and switching eligible policyholders to other carriers where possible.

All legislation died, Friedlander said.

"There's a lot of criticism," Friedlander said, adding many in the insurance industry believe there wasn't enough focus on these pressing issues.

Instead, attention was given to "controversial" bills, he said, such as the "Don't Say Gay" bill that will limit what public school teachers can discuss in class; and the "Anti-Woke" bill that seeks to curtail critical race theory in education and corporate training.

"There was clearly a priority on certain types of legislation this year, but not on helping the homeowners of Florida survive a very volatile insurance market," Friedlander said. "There was no significant property insurance legislation that passed during session. Very disappointing."

Homeowners insurance premiums expected to rise

There still may be one glimmer of hope, Friedlander said.

Gov. Ron DeSantis could call a special session this summer to readdress these bills, and two senators – Sen. Jeff Brandes, R-St. Petersburg, and Senate President Wilton Simpson, R-Tribly – publicly have backed the notion.

Until then, there is no question these issues will worsen throughout the year, Friedlander said, predicting homeowners' premiums will continue to rise and more insurers will face liquidation.

Property insurance policies are expected to increase 30-40% this year, he added, and insurance companies are estimated to see $1.7 billion in underwriting losses for 2021.

Moreover, two Florida insurers already have liquidated this year, Friedlander said, and about five or six other carriers now are at risk.

"This is going to have a detrimental effect on the Florida property insurance market," he said. "For homeowners, for insurers – it's going to hurt all parties involved."

Catie Wegman is TCPalm's community and real estate reporter. You can keep up with Catie on Twitter @Catie_Wegman, on Facebook @catiewegman1 and email her [email protected].

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"There was clearly a priority on certain types of legislation this year, but not on helping the homeowners of Florida survive a very volatile insurance market. There was no significant property insurance legislation that passed during session. Very disappointing."

Mark Friedlander

Spokesperson for the Insurance Information Institute