Florida lawmakers to hold special session on property insurance crisis ahead of hurricane season – NBC 6 South Florida

0

Florida lawmakers are scheduled to return to the Capitol on Monday to begin a special legislative session to address issues in the state’s property insurance market ahead of the impending hurricane season.

The property insurance crisis is persistent and multifaceted, especially in South Florida, an area vulnerable to hurricane damage.

According to the Insurance Information Institute, property insurance premiums in Florida are expected to jump 30-40% on average in 2022, and many will likely see renewal increases well over 50%.

With hurricane season around the corner, which experts say will bring “above normal activity”, legislation is even more urgent.

So far, AP reports that three carriers — Lighthouse Property Insurance Corp., Avatar Property & Casualty Insurance Co. and St. Johns Insurance Co. — have been declared insolvent and placed in receivership since February.

That left tens of thousands of homeowners scrambling to find new coverage just weeks before the start of hurricane season.

NBC 6’s Alina Machado spoke to an insurance lawyer about the lawsuits filed last year.

Governor Ron DeSantis called the session after lawmakers failed to reach an agreement on insurance changes during this year’s regular session, according to the News Service of Florida.

The regular session, which ended in March, was dominated by bills dealing with abortion, race, gender and sexual orientation.

Separately, lawmakers wrapped up another contentious special session in April over congressional redistricting and legislation to dissolve a private government that Walt Disney World controls on its Florida property.

Legislative leaders announced that this upcoming session, which runs from May 23-27, will focus on issues such as roof damage claims, litigation and reinsurance.

“I believe the legislation I will introduce for your consideration in the Special Session will address the many issues leading to the instability of the current property insurance market in our state,” Senate Speaker Jim Boyd wrote. R-Bradenton, in a note to senators. “The proposal balances fair costs and protections for consumers while adding reasonable safeguards for insurance companies against frivolous litigation and fraudulent claims that drive up rates for everyone.”

NBC 6’s Alina Machado has the latest on the trials and tribulations homeowners are facing amid the current property insurance crisis.

Outline released by the House and Senate indicated that much of the legislation will deal with roof damage claims, reports the News Service of Florida. Insurers blame dubious, even fraudulent, roof damage claims for driving up costs.

Insurers have also long blamed litigation for industry problems, according to News Service of Florida. The legislation, in part, would impose additional restrictions on so-called “contingent fee multipliers” that can significantly increase the fees paid to attorneys who represent policyholders in insurance disputes, the outline says.

The legislation would also authorize $2 billion to expand insurers’ access to the Florida Hurricane Catastrophe Fund, a state program that provides relatively inexpensive reinsurance. The House plan said participating insurers would have to cut rates for policyholders to reflect the savings.

Many insurers must have reinsurance contracts by June 1 and are struggling to find critical relief coverage, News Service of Florida reports. Industry officials say global reinsurers have raised prices and limited the amount of coverage they sell in the Florida market.

According to the News Service of Florida, the state Insurance Regulatory Board approved an agreement on May 13 that will lead FedNat Insurance Co., Maison Insurance Co. and Monarch National Insurance Co. to cancel 68,200 policies. The three insurers are part of the same holding company.

Following market problems, thousands of policies a week have been paid out to the state-backed Citizens Property Insurance Corp, which has been set up as an insurer of last resort.

Citizens had more than 851,000 policies at the end of April and are expected to top 1 million this year, according to News Service of Florida. Lawmakers could also require changes to citizens’ property insurance.

In his proclamation reminding lawmakers in Tallahassee, Republican Gov. Ron DeSantis pointed to several issues that have contributed to higher insurance rates in the state, AP reports. Problems include high rates of insurance disputes that drive up premiums and massive underwriting losses for insurance companies that have led to, among other things, insolvency or cancellation of policies.

In an interview, Florida Chief Financial Officer Jimmy Patronis also highlighted the litigation problem, saying the state accounted for 9% of all claims filed nationwide last year, but nearly 80% of all property insurance claims. Florida law makes it very profitable for attorneys to sue insurance companies even if the amount won is relatively small, and previous moves to cap attorney fees haven’t stopped the legal fee rush, reports PA.

NBC 6’s Alina Machado has the latest on the hardships local homeowners are facing amid the property insurance crisis.

“The market is currently experiencing challenges that I don’t know if I’ve ever seen in my 16 years in Tallahassee,” Patronis said. “We are currently at a stage where litigation fraud and abuse are deterring capital markets from wanting to deploy money into the Florida market.

Still, AP reports that Patronis, a Republican, warned that next week’s legislative package would not provide immediate financial relief to homeowners.

There has been a growing consensus among lawmakers on the need to reform certain aspects of property insurance law, with DeSantis saying the goal would be “to bring some common sense, stabilize and have a functioning market”.


Source link

Share.

Comments are closed.