Mark Lane: Windstorm Insurance Sticker Shock Hits Florida Homeowners
News-Journal (Daytona Beach, FL)
I live in a home that is almost a half-century old that generally tracks the median home value in my ZIP code. This makes it a conveniently representative property.
This year, my windstorm insurance shot up by roughly double the rate that I've seen over the past six years. The coming hurricane season's windstorm insurance premium will rise by almost 30%, more than $400, over the year before. An amount that has more than doubled since 2016. No, this is not a waterfront home. And no, a windstorm claim has never been made on this property. Instead, this is typical of something happening all over Florida this year.
Surging insurance rates: DeSantis calling special legislative session to tackle insurance crisis
People look at their mortgage payment adjustments each year and often assume the increase is the result of taxes going up. But anyone looking more closely at the numbers will discover that property insurance rates are the big thing driving up their monthly house payments.
It is not like Florida legislators are unaware of this. Legislation passed last year that addressed some of the insurance problems, and this year, additional legislation was debated but legislators were too busy fighting the culture wars to think it was too important. When there are schoolbooks to ban and wokeness to fight, who wants to spend time on boring ol' insurance regulations?
Insurance measures were missing when Gov. Ron DeSantis called for a special session to address his redistricting demands but a strong bipartisan push emerged to deal with insurance costs now rather than waiting until next year's regularly scheduled session. Sensing that he needed to get in front of this parade, Gov. Ron DeSantis on Monday called for another special session next month on a developing homeowners' insurance crisis.
The governor said at a Jacksonville news conference that he wants to "bring some sanity and stabilize" Florida's property insurance market. Sanity is a big ask — this is Florida — but stability would be appreciated.
Like more than 800,000 other Floridians, my windstorm insurance is Citizens Property Insurance, a state-backed company that is supposed to be the "insurer of last resort" but is now the insurer of most resorts. The only game in town for much of the southeastern coast.
Citizens Insurance fills gap
Citizens was a 2002 creation of the Florida Legislature. It was needed because the private windstorm insurance market in Florida collapsed due to repeated bad hurricane seasons. I'm always kind of amused looking back that socialized windstorm insurance coverage was one of Gov. Jeb Bush's important accomplishments.
I've been with Citizens since 2004. Every year they invite me to take my business elsewhere. They even try to hook me up with someplace else. I try not to take this personally and turn them down each year after looking into insurance operations that have been in business for easily more than a month. Cross-Our-Hearts Bitcoin, CBD Oil and Windstorm Insurance Solutions Inc. wants your business!
Citizens has a legislative mandate to shed policies and shrink. Depopulating, it's called. But instead of getting rid of questionable customers like myself, Citizens instead has been growing because smaller windstorm insurers have been closing up and getting out of the business at an alarming clip.
There are a lot of culprits to Florida's insurance crunch: fraud, litigation, the costs of roofs, roofing scams, and active hurricane seasons the most often cited.
Legislation was passed on this last year but has had no effect. House Speaker Chris Sprowls tried to claim that no special session was needed because the bill did such an excellent job. It did not. Much of that bill remains blocked in federal court.
One of the bill's measures, forbidding roofing companies and contractors from "written or electronic communication that encourages, induces, or instructs someone to contact a contractor or public adjuster for the purpose of filing an insurance claim for roof damage," pretty obviously violates the First Amendment, something a U.S. district judge helpfully pointed out to the state within a month of the law taking effect.
It's good news that a special session to deal with a practical pocketbook issue is planned. But what to do about this is yet unclear. Some limits on roofing payouts seem likely. But whether these proposals would hit post-disaster homeowners harder than fraudsters and sharp operators remains to be seen. Certainly new tools against fraud need to be part of the mix.
For now, it's one thing to call a special session. It's a heavier lift to actually come up with something to do during a special session. Lots here for a homeowner to watch.