May 21, 2022
  • May 21, 2022

Florida Property Insurance Market’s ‘Huge Losses’ ‘Unsustainable’ New

By on October 14, 2021 0

Many Florida real estate insurers are chasing double-digit rate hikes citing rising reinsurance costs, “river loss” from the 2017-18 hurricanes, coastal flooding and litigation.

Florida lawmakers have tried to slow the flare-ups with their 2019 passage of a “benefit allocation” reform bill and this year’s approval of Senate Bill 76, which cuts the filing deadline. claims of three to two years, reduces “multiplier costs” and allows insurers to cover only the depreciated value rather than the full value of replacement roofs over 10 years.

While these laws focus primarily on reducing fraud and litigation, they do little to address the troubled state property insurance market, dominated by small-cap independents since large corporations began operating. insurance abandoned the state in the early 2000s.

Minority Parliamentary Co-Leader Evan Jenne D-Dania Beach wonders if lawmakers need a new approach to solving the decades-old property insurance crisis when they convene their legislative session 60-day 2022 January 11.

“Should we be going in a completely different direction?” “He asked on Wednesday after a presentation by Citizens Property Insurance Corp. President / CEO Barry Gilway to the House Insurance & Banking subcommittee.

“What we tried to do, a lot of it was built on top of each other,” Jenne said. “Yet we keep finding the same results over and over again and we find ourselves in these sticky situations. Should we be looking for something new?”

Gilway called on lawmakers to tackle the “sea of ​​red ink” that is contributing to the sustained net income losses experienced by dozens of Florida private insurers, attributing much to the costs of reinsurance, mostly insurance. for insurers funded by catastrophic fund markets.

Gilway said the state’s Office of Insurance Regulation (OIR) received 105 rate requests in 2020 from insurers seeking increases above 10%, calling the state’s insurance market “no viable ”.

“The consistency of losses across the market is absolutely astounding,” he said. “It’s not a decision that one or two companies make. The reality is that what happens in the market has an impact on every company in the market.”

Including Citizens, which was created by the legislature in 2002 to serve as a state-backed “insurer of last resort” for the 6.5 million Florida homeowners unable to find home insurance.

In 2012, the number of citizens’ policies increased to 1.5 million, with the state supporting $ 10 billion in property insurance policies. A “depopulation” initiative to shift policies – and liability – to private insurers reduced the number to 419,475 in October 2019.

But when Citizens added nearly 22,000 policies last month, the number jumped to 708,919 policies, supporting nearly $ 7 billion in properties, nearly 200,000 more than on September 30, 2020. Citizens expect more. registrations from 1 million to 1.3 million in 2022.

Last month, the Citizen’s Board of Governors unveiled three proposals for the 2022 session to reduce the number of its policies while increasing costs for policyholders. In essence, they allow citizens to transfer policyholders under its program to private insurers if their rates do not exceed those of citizens by more than 20%. The subcommittee did not discuss these proposals.

Representative Tom Fabricio, R-Miramar, said lawmakers should consider opening up the insurance market to surplus line carriers and Representative Matt Willhite, D-Wellington, said a disabled veteran had him said he risked losing his home because he couldn’t. pay your home insurance bill.

“Where is the breaking point for the disabled military veteran, on a fixed income, who cannot insure his house, when he himself is at a breaking point? ” He asked.

Original location: Florida Home Insurance Market’s “Huge Losses” Are “Unsustainable”

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