May 21, 2022
  • May 21, 2022

FL Senate bill changes property insurance; The house version differs

By on April 7, 2021 0

With lawmakers taking very different positions on what would be best for consumers, the Florida Senate on Wednesday passed a major property insurance bill that targets roof damage claims and litigation against companies. insurance.

Supporters of the bill (SB 76) said lawmakers must approve it to curb soaring insurance rates for homeowners. They said private insurers are grappling with significant financial losses that have led to rate hikes and customers turning to the state-backed Citizens Property Insurance Corp. for coverage.

“It’s not easy, I understand it,” said Senate Banking and Insurance Chairman Jim Boyd, a Republican from Bradenton sponsoring the bill. “It’s important and it’s necessary.

But some Democrats have argued that the changes proposed in the bill, including allowing insurers to limit the amounts paid for roof damage, would hurt consumers and that the measure does not guarantee that rates will go down.

Senatorial Minority Leader Gary Farmer D-Lighthouse Point accused insurers of “cooking their books, outright.” He said Florida had gone 10 years without a major storm and that insurers were “swimming in profits.”

“This crisis is fabricated,” said Farmer, a plaintiffs lawyer who frequently criticizes insurance companies. “It is made flat. “

Farmer’s comments drew a strong reaction from Boyd, who described them as a “gross misrepresentation” of what is going on in the insurance industry.

“Some of the comments border on libel in my opinion,” said Boyd, an insurance agent.

Rate increase last year

The debate comes after state regulators last year approved dozens of tariff increases exceeding 10%. Additionally, as the market tightened, Citizens Property Insurance, which was established as an insurer of last resort, has won over 100,000 policies in the past year.

Part of the Senate bill is intended to respond to insurance companies’ arguments that dubious and even fraudulent roof damage claims drive up costs. Industry and some lawmakers report that contractors are soliciting homeowners to file claims for new roofs.

The Senate bill would create what is described as a “repayment schedule” that would allow insurers to sell policies offering reduced payments for repair or replacement of roofs over 10 years old. For example, insurers could reimburse 70% of the costs for metal roofs older than 10 years and 40% of the costs for concrete and clay tile roofs.

The change would actually move more costs for many homeowners when they have roof damage.

Boyd said customers would be able to purchase additional coverage for roof damage and that the proposal takes into account that roofs have a life expectancy. But critics argue the change could result in significant and unexpected costs for homeowners with roof damage.

“I think this is a really dangerous path for consumers to reduce coverage,” said Senator Tina Polsky, D-Boca Raton.

Protection against litigation too

The bill also seeks to reduce litigation against insurers, in part by limiting the fees paid to lawyers who represent plaintiffs. Supporters of the bill blame lawsuits for rising costs, while opponents say homeowners are forced to go to court because insurers do not pay claims properly.

Florida allows plaintiffs to collect attorney fees when they prevail in cases against insurance companies, the amounts usually set by a calculation of the number of hours spent on a case and a reasonable hourly rate.

But courts can also approve so-called “emergency risk multipliers” that increase fees. Under the Senate bill, however, emergency risk multipliers could only be granted “in rare and exceptional circumstances with proof that a competent lawyer could not be reasonably retained.”

The Republican-controlled Senate voted 27-13 to approve the bill, largely along party lines. Senator Ray Rodrigues, R-Estero, was the only Republican to vote against the bill, while Senator Lauren Book, D-Plantation, Senator Randolph Bracy, D-Ocoee, Senator Jason Pizzo, D-North Miami Beach and Senator Linda Stewart, D-Orlando, supported him.

The house bill is quite different

With the legislative session set to end on April 30, the Senate is expected to come to an agreement with the House, which has moved forward with a very different property insurance bill (HB 305). For example, the House bill would not allow insurers to offer reduced payments for roof damage.

Senator Jeff Brandes, R-St. Petersburg, said opponents of the Senate bill “do not understand what will happen” with increased insurance rates if the measure is not passed. He also alluded to the difficulty of reaching an agreement with the House.

“We have to do it and we have to stay strong as this bill comes along. This is the other big challenge that we have to face, ”said Brandes.

But Brandes’ comment that opponents don’t understand “what’s about to happen” clearly angered Sen. Victor Torres, D-Kissimmee, and Sen. Perry Thurston, D-Fort Lauderdale. Torres responded to Brandes by citing the veterans and seniors he represents who live on a fixed income.

Thurston said: “I obviously don’t get it either.”

“You don’t solve the problem by doing everything and putting all the burden on the citizens,” he said.

This story was originally published April 7, 2021 4:53 pm.