Property Insurance Market – Courtesy: Shutterstock – Image by Alexander Raths
The Sunshine State has not seen a major storm in several years, but policyholders across Florida are dealing with a different kind of catastrophe.
“We’re spiraling toward a collapse of the private insurance market in Florida, meaning there will be no options for Florida homeowners to get coverage with a private insurer,” Mark Friedlander, director of the Insurance Information Institute, said.
Florida legislators are working on giving $2 billion in public funds to several private insurance companies. Supporters aim to prepare a reinsurance fund and a series of several other benefits.
The hurricane season starts on June 1 and many residents are dealing with high insurance premiums, separate deductibles for their roofs, and cancellations–among other issues.
“We don’t want to be in a situation where hundreds of thousands of people are losing their policies,” Gov. Ron DeSantis said.
On Monday, legislators met for a week-long special session in the state capital to debate the new solution to the increasing property insurance market crisis.
“My clients had called Tower Hill [Insurance] and said, ‘Why am I getting a 100% increase?’ Their answer was, ‘Because the state of Florida said we could,’” said Richie Kidwell, of the Restoration Association of Florida, which supports independent contractors.
Democrats went against the new legislation saying it would place limits on lawsuits against insurers to get their claims paid for. “Frivolous bad faith” lawsuits, according to Florida Insurance Commissioner David Altmeier, are contributing to a price spike. He is advocating for boundaries.
“If an insurance company gets sued and they end up paying an amount because of that litigation that’s part of their loss cost,” Altmeier said.
Citizens Property Insurance was established by lawmakers in 2002. Since June 2012, Barry Gilway has served as president, chief executive officer, and executive director. Roof replacement scams, he claims, aren’t helping.
“That has been a money grab by attorneys, by public adjusters, and by contractors. It’s staggering,” Gilway said.
To better support consumers, Republicans said the law is designed to stop insurance companies from discriminating against those who own homes with older or newer roofs after passing an inspection.
“We are here to try to protect the insurance industry and ultimately the taxpayer as well as the homeowner,” said Attorney Aram Papken Megeria, of the Florida Justice Reform Institute, a nonprofit public interest law firm.
Regardless of what lawmakers decide on during this special session, analysts say it will be another 18 to 24 months before homeowners see any signs of relief.
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Melissa’s career in writing started more than 20 years ago. Today, she lives in South Florida with her husband and two boys.