Property insurance costs, storm resilience are priorities

Prior to the start of this legislative session, Florida lawmakers were widely expected to make progress toward improving resilience of properties, including increased funding for the My Safe Florida Home grant, while also letting the recent legal reforms credited with stabilizing the state's insurance market continue to work before making additional reforms.

However, what played out in session was shocking to say the least. While the Florida Legislature passed legislation that expanded the My Safe Florida Condominium Pilot Program to help condo owners harden their properties from storms, the Florida House also pursued a reversal of the aforementioned reforms. The House filed legislation to reverse the hard-fought legal reforms and return back to the status quo of a few years ago when Florida had some of the largest property insurance rate increases in the country.

This was the wrong call and many lawmakers and the governor balked at this attempt to go back on these reform efforts only a few years into them. Thankfully, the Florida Senate agreed that reversing reforms now would do nothing to improve insurance rates for policyholders and put a stop to the bill in its chamber to give more time to allow for the reforms to take hold. The bill ultimately was withdrawn from consideration.

However, this does not mean that all is perfect in Florida's property insurance market. Floridians still pay among the highest property insurance bills in the country and while the percentage rate of increases have gone down, people are still seeing increases in their bills each year.

Florida has long flirted with the seductive idea that we can legislate away the price of hurricane exposure by artificially lowering rates. From rate freezes to mandatory rollbacks, we've repeatedly treated high premiums as a political failure rather than a financial signal. But risk doesn't disappear because we vote it down. It simply moves underground, only to reemerge when disaster strikes.

For example, when Citizens Property Insurance Corp. underprices risk, or when state regulators restrict private insurers from charging actuarially sound rates, we may enjoy temporary relief. But the market doesn't forget.

Insurers leave. Capital dries up. And when the losses come, as they always do, the money has to come from somewhere.

It's a classic bait-and-switch: legislate artificially low premiums, then shift the true cost onto the public after the next storm passes and headlines fade. This "hurricane tax" is a hidden levy we all pay for the comfort of denial. Actually addressing the property insurance affordability crisis requires reduction of risk among new and existing properties and not hiding costs.

The National Institute of Building Sciences estimates that every $1 spent on mitigation saves $6 to $7 in future disaster recovery costs. Programs like the previously mentioned My Safe Florida Home grant have already demonstrated their value and continue to see funding increases, providing grants and inspections that help homeowners strengthen their properties. The results for those taking advantage of the program: fewer claims, less damage and quicker recoveries.

Florida policymakers have made good-faith efforts into stabilizing the market but there is more we can do to improve the market. Now, we need to allow insurance pricing to reflect exposure to risk and to continue offering mitigation grants to strengthen homes. Mitigation may not offer the same short-term political wins as artificially cutting rates but it does offer a long-term solution that will benefit all Floridians.