Florida insurance bills approved by Legislature aim to save homeowners money

Lawmakers approved a $200 million extension of the My Safe Florida Home program and created a separate program to help condo owners.

But a bill allowing surplus lines carriers to take out second-home policies from state-owned Citizens Property Insurance Corp. was approved, which critics say could subject snowbirds to failures by insurers whose policies are not guaranteed by the Florida Insurance Guaranty Association.

The Legislature also failed to approve bills that would allow the Office of Insurance Regulation to increase limits on insurable values eligible for Citizens coverage and prevent cancellation or nonrenewal of policies covering flood-damaged homes.

The Legislature finished its work for the year on Friday and, barring Gov. Ron DeSantis calling a special session, left insurance customers to continue to wait for reforms enacted in 2022 and 2023 to begin stabilizing rates.

Whether that will happen is anyone’s guess. In the meantime, a few bills were sent to DeSantis that could bring some relief:

My Safe Florida Home program extension

The popular program that provides up to $10,000 for specific home-hardening improvements was extended for the 2024-2025 budget year with a major revision: For 60 days, only applications by low- and moderate-income homeowners will be considered. This marks a major change from the program’s initial 16 months, when inspections and grants were awarded on a first-come, first-serve basis. Broward and Palm Beach County homeowners rushed to the front of the line, securing 9,971 of 29,921 grants, worth close to $100 million, awarded through Feb. 16.

When the program is scheduled to restart on July 1, it will accept only applications from low-income homeowners age 60 and up for the first 15 days, followed by low-income applicants of all ages for the following 15 days. Then applications from moderate-income homeowners age 60 and up will be accepted for 15 days, followed by all moderate-income homeowners.

Homeowners qualifying as low-income will not have to pay the $1-for-$2 match required of other applicants but will still be approved for up to $10,000 to spend on such upgrades as installing impact-resistant windows, garage doors and exterior doors. The grant will also be available for reinforcement of roof-to-home connections or applying a secondary water barrier to roofs — both of which typically require new roof coverings, which the program will pay for.

Grant recipients will be required to submit documentation of how the improvements affected their insurance premiums.

My Safe Florida Condominium Pilot Program

This program, patterned after the one that funds improvements for single-family homes and townhomes, will provide up to $175,000 to make the same improvements to condominium buildings, following a vote by a majority of association board members and all unit owners living in the building that would be improved.

The condo program would also require the association or unit owners to spend $1 for every $2 awarded, and provides just $25 million for grants in its first year. That’s enough for no more than 142 grants of $175,000 each.

Surplus lines insurers and Citizens’ second homes

A bill allowing surplus lines insurers to take out Citizens policies on second homes has consumer advocates concerned because surplus lines insurers are not regulated by the state, nor do their customers qualify for rescue by the Florida Insurance Guaranty Association if the insurers go bankrupt.

The bill would require approval of insurers’ plans by the Office of Insurance Regulation.

Participating insurers would have to have at least an A- or better from ratings agency A.M. Best.

The takeout insurer would have to match provisions of the Citizens policy for the remainder of the insurance policy term. And selected homeowners would be able to go back to Citizens at the end of the term if no replacement policy was available that exceeded the cost of the Citizens policy by 20% or less.

Second homes are defined as one that the homeowner or tenant lives in for fewer than nine months a year. Citizens says about 77,000 policies fall into this category.

Concerns voiced on the floor of the House last week about the bill’s possible effects on snowbirds struck a chord: Just before the bill was finalized, the Senate added a provision protecting homesteaded properties from takeouts by surplus lines companies, and the House agreed.

Citizens flood insurance requirement

When a 2022 bill that required Citizens customers to purchase separate flood insurance policies was enacted, lawmakers apparently did not consider that it required homeowners to also purchase contents insurance as part of their flood coverage. Removing the requirement would save Citizens customers a few dollars on their flood insurance policies.

Roof repair contracts

Homeowners would have 10 days to cancel contracts to repair or replace damaged roofs if the contract was signed during a state of emergency.

Current law allows cancellations only if roof contractors fail to provide notice to policyholders of prohibitions on practices such as offering kickbacks for insurance-funded work or failing to provide an estimate before asking for a signature on a contract.

Insurance tax relief

A one-year waiver of the 1.75% tax on residential property policies would apply for homesteaded properties only, along with suspension of the current 1% Florida Insurance Guaranty Association tax.

For homeowners paying $6,000 a year for their insurance policy, the waivers would save them $165.

What measures failed

Numerous proposals failed to make the cut this year, including one that nearly made it to the finish line — a bid to allow the Office of Insurance Regulation to raise the insurable value of homes eligible for Citizens coverage from $700,000 to $1 million in specific ZIP codes deemed by the OIR to lack a competitive insurance market.

The provision was in both Senate and House versions of the bill that included the surplus lines takeout proposal but removed prior to a Feb. 22 vote by the House Commerce Committee.

Another bill that would have extended eligibility across the state also failed to gain traction.

Currently the $1 million limit applies only to Miami-Dade and Monroe counties and advocates have been asking insurance regulators since 2022 to conduct an updated competitiveness study to determine whether to include other counties.

Writers of the bill thought narrowing territories to ZIP codes might might make the proposal more palatable.

Insurance cancellation barred for flood-damaged properties

Favored by the Florida Association of Independent Insurance Agents, a bill that would have prohibited insurers from canceling policies of flood-damaged properties until the damage was repaired or a subsequent policy renewal expired.

FAIA’s president, Kyle Ulrich, said the ban is needed because it’s nearly impossible for agents to find insurers willing to cover damaged properties.

But after clearing three Senate committees, the bill was stopped after leaders of some insurance companies and the Professional Agents Group said it could impact insurers’ willingness to write wind policies in flood-prone areas, the Insurance Journal reported.

Current law already bars cancellations and nonrenewals until 90 days after damages covered by property insurance are repaired.

Removal of ban on Citizens’ wind-only coverage for buildings with a majority of short-term rentals

This bill died after a favorable vote by the House Insurance and Banking Subcommittee.

Adding flood mitigation grants to My Safe Florida Home program

Was not heard by any House or Senate committee.

Requires insurers to offer coverage equal to unpaid mortgage balance

Because only homes with mortgages are required to be insured, several lawmakers proposed allowing homeowners to insure only the amount still owed to the mortgage lender. It was not advanced to any committee.

Disclosure of litigation financing sources

Would have required disclosure of hedge funds and other deep-pocketed sources of funding for plaintiffs for litigation that’s primarily targeted against insurers. Would have also banned financing of plaintiff’s personal expenses during the litigation and prevented financiers from making decisions about the cases. Stalled in the House after a favorable vote by the Civil Justice Subcommittee.

‘Citizens for all’

A proposal by Rep. Spencer Roach and Rep. Hillary Cassel to make Citizens’ windstorm coverage available to all homeowners who want it predictably died on the vine prior to being heard by any House committee.

A bill essentially turning Citizens, the “insurer of last resort,” into the statewide insurer of first resort had no chance, especially with Citizens’ population close to 1.2 million and lawmakers rejecting any bills that could expand the company’s risk.

Roach and Cassel were instead pitted against Citizens’ CEO Tim Cerio in a workshop before the House Insurance and Banking Subcommittee that enabled the lawmakers to explain why they believe the proposal is necessary and inevitable, and Cerio to counter that it could end up forcing Citizens to require emergency assessments from nearly all Florida insurance consumers.

Ron Hurtibise covers business and consumer issues for the South Florida Sun Sentinel. He can be reached by phone at 954-356-4071, on Twitter @ronhurtibise or by email at [email protected].

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