Florida Governor Ron DeSantis Signs Property Insurance Bill That May Bring Higher Rates

TALLAHASSEE (CBSMiami/AP/NSF) -- Florida Gov. Ron DeSantis signed a property-insurance bill on Friday meant to give relief to a large sector of the state's insurance industry, but may also lead to larger rate increases for customers of the state-backed Citizens Property Insurance Corp.

State Rep. Bob Rommel supports the law saying, "With this stability in the market place I think we'll definitely attract new carriers and once we get thru the backlog of lawsuits waiting to be heard i think we'll see rates stabilize," he said.

Faced with losses from rising claims, the industry welcomed changes that would restrict some practices by contractors.

The law would forbid contractors from soliciting homeowners to file roofing claims.

Public Adjuster Eli Goins from Ocean Point Claims Company said that's one of the good points.

"The good part of getting roofers off the streets, number one, we're going to keep the claim legitimate and two make it a level playing field for the insurance company," Goins said.

On the flip side, he said the new law allows insurance companies even more time to accept or reject a claim, discouraging homeowners.

"They often will throw their hands up and give up on that claim and that's what the insurance company is looking for because the insurance company ultimately saves money at that time," Goins said.

The law also would narrow the time frame in which homeowners can file claims, from three years to two years, Democratic State Senator Gary Farmer says the legislation is anti-consumer.

"Oftentimes, people have hidden or latent damage that takes a long time to manifest itself," Sen. Farmer said. "So the shortening of the claim period is very potentially harmful to consumers."

The legislation also enacts new rules on litigation.

DeSantis said the changes are going to "make a big difference." But the bill drew criticism during the legislative session, in part, because it would allow larger rate increases for Citizens customers.

While it was created as an insurer of last resort, Citizens is a major insurer of homes in areas such as heavily populated Southeast Florida and the legislation raises the cap on annual rate increases that Citizens can charge its customers. That cap will rise from 10% to 15% over the next five years.

"There is no sugar-coating this," Sen. Annette Taddeo, D-Miami, said before the bill passed. "It literally is going to raise the rates." Sen. Farmer urges consumers to fight back. "They're making record profits and they're doing it on the backs of consumers and consumers need to unite and get with consumer protection groups and help fight these changes in Tallahassee," he said.

Altmaier's Office of Insurance Regulation recently approved consent orders to allow three companies --- Gulfstream Property and Casualty, Universal Insurance Company of North America, and Southern Fidelity Insurance Company --- to cancel or not renew more than 53,000 homeowner policies.

Altmaier said Friday that less than 1,000 of the impacted homeowners have so far gone into Citizens.
"Which we view as a positive statistic, because that indicates that the private insurance market is interested in writing business and interested in growing," Altmaier said.

But Citizens officials have repeatedly said they expect a continued surge in policies this year. As of April 30, Citizens had 589,041 policies, up from 453,911 a year earlier. Citizens President and CEO Barry Gilway said the policy count could reach 750,000 by the end of the year.

"On a straight-line basis, we're looking at 750,000 policies, assuming the current rate of about 5,000 net new customers per week," Gilway said during a Citizens board meeting in May.
The legislation

At a bill-signing event Friday in Sarasota, Insurance Commissioner David Altmaier said he has seen changes from private insurers since lawmakers passed the measure, which will take effect July 1.
"Carriers have brought in additional private market capital to re-bolster their balance sheets.

We have seen positive news from the reinsurance markets with respect to the direction that reinsurance rates are going, which is a critical component of our marketplace," Altmaier said. "And we're seeing private carriers pick up additional policies around the state as carriers reoptimize their portfolios as we head into a very critical hurricane season."

Senate sponsor Jim Boyd, R-Bradenton, said it will take time for the bill's changes to "filter through the system," and lawmakers will determine if additional "tweaks" are needed to improve the market. Boyd and other backers of the measure have pointed to problems with litigation costs and questionable, if not fraudulent, claims for such things as roof damage.

Insurers had sought much more from lawmakers during this year's legislative session but had to settle for a scaled-back bill that removed some key provisions — including one that would have allowed insurers to limit coverage more strictly for replacing damaged roofs.

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