Lower insurance rates not coming soon, Florida lawmakers say

Senators are moving quickly, but questions went unanswered.
The bridge leading from Fort Myers to Pine Island was heavily damaged by Hurricane Ian.
The bridge leading from Fort Myers to Pine Island was heavily damaged by Hurricane Ian. [ GERALD HERBERT | AP ]
Published Dec. 12, 2022|Updated Dec. 13, 2022

TALLAHASSEE — Could Floridians see lower property insurance rates?

Probably. Eventually.

That was the testimony by Florida’s insurance regulator, who gave a tepid endorsement on Monday to Republican lawmakers’ latest plan to address Florida’s insurance crisis, the fourth in as many years.

“I think that this will go a long way into mitigating the rate increases,” Insurance Commissioner David Altmaier told a Senate committee. He said he was “optimistic,” but cautioned: “This will take some time.”

How much time — and how much homeowners could save — were among the key questions that lawmakers were unable to answer Monday as they met in Tallahassee for a special session called by Gov. Ron DeSantis.

Related: Florida lawmakers reveal major proposed changes to property insurance laws

Their solution is to largely give insurance companies what they want: reduce the incentives for attorneys to file lawsuits against them, give homeowners less time to file a claim and create a $1 billion taxpayer-funded program to help struggling insurers.

The changes also include forcing some homeowners out of the state-backed Citizens Property Insurance by not allowing them to renew their policy if a private insurer offers them a rate that’s not more than 20% higher than Citizens’. Plus, every Citizens policyholder would have to have flood insurance by 2027.

In exchange, lawmakers are shortening the time frames for insurers to respond to claims. Insurers would have:

  • 60 days, instead of 90, to pay or deny a claim
  • 30 days, instead of 45, to conduct a physical inspection
  • Seven days, instead of 14, to review and acknowledge a claim communication or begin an investigation

“This is a good and balanced bill that covers a lot of the issues that we’re still seeing in the market,” said Sen. Jim Boyd, R-Bradenton, the Senate bill sponsor.

Lawmakers move fast

Lawmakers set aside a week for the special session, but they were expected to be back home well before the weekend. House Speaker Paul Renner, R-Palm Coast, told House members that he expects all work will be done by 6 p.m. Wednesday.

“So you can plan your travel accordingly,” Renner said.

Two Senate committees hearing the property insurance bill moved briskly on Monday. One of them allowed only a minute for each person to offer public comment and rejected several amendments from Democrats. The full Senate is expected to vote on it on Tuesday.

“It’s a 105-page bill that came out on Friday,” remarked Sen. Bobby Powell, D-West Palm Beach, before voting against it.

The brisk pace was a reflection of the weeks of negotiations between Gov. Ron DeSantis’ administration and House and Senate GOP leaders — and years of failure to address the failing insurance market.

Today, Floridians pay the most for property insurance in the nation, about three times the national average. Six companies have gone insolvent this year.

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“We’re here today because it’s the only thing we haven’t tried,” said Sen. Danny Burgess, R-Zephyrhills. “I think that we’re at the end of the rope.”

Insurers and business groups say two main problems are plaguing the market.

One is litigation. In 2019, Florida accounted for 16% of the nation’s homeowners claims, but 76% of the nation’s litigated homeowners claims, state regulators say.

The other is the high cost of reinsurance, which is insurance that insurers buy.

To address litigation, lawmakers want to eliminate the requirements that property insurers pay the attorney fees of policyholders who successfully file lawsuits over claims.

Lawmakers are also set to end the practice of “assignment of benefits,” in which policyholders sign over their benefits to contractors, who seek payment from insurers.

To address reinsurance, lawmakers want to create a new, taxpayer-funded $1 billion program to offer it, mimicking a similar program they created this summer.

The legislation was denounced by attorneys, who warned that consumers would be harmed.

One of their clients was Jonathan Albaugh, an Air Force veteran who described himself as a “card-carrying Republican.”

Albaugh told senators his Mexico Beach home was heavily damaged after 2018′s Hurricane Michael.

His insurer, FedNat, which went insolvent in September, gave them an inappropriately low offer, prompting them to sue, he said. The company had eight different adjusters on his claim, he said.

Albaugh, his wife and their six kids are now living in a rented RV at Tyndall Air Force Base while still paying a mortgage on their home and battling their insurance company.

“Yes, it feels like David vs. Goliath,” Albaugh told senators. “This bill gives Goliath a better helmet.”

Alternatives rejected

The Republican supermajority in the House blocked an effort by House Democratic leader Fentrice Driskell, D-Tampa, to consider another property insurance proposal.

Her bill, among other things, would have required insurance companies that offer other products in Florida to also offer homeowners insurance. It would have tied premium increases to the Consumer Price Index or a sliding fee scale.

Florida’s insurance commissioner would return to being elected, and the Legislature would create a Property Insurance Commission to study the issue, according to Driskell’s bill.

“Too often, we’ve seen these policy changes that promise reduced rates, but none of them have delivered so far,” Driskell said.

Democrats said they were frustrated by how little lawmakers know about the insurance crisis. Democrats asked: Insurers say the lawsuits are frivolous, so how many are found to be in violation of Florida’s frivolous lawsuit statute? What’s the average cost of a claim against an insurer? What did the CEOs of failed insurance companies earn?

Related: Florida insurance company execs saw big payouts in years without hurricanes

Boyd and Senate staffers on Monday didn’t know the answers to the questions.

Last year, lawmakers passed a bill requiring state regulators to collect information from insurers about their lawsuits. But Altmaier told lawmakers on Monday that the information won’t be available until March — nearly two years after lawmakers passed the bill.

“There’s a lot of information that’s not made available for us to make informed decisions, really, about what is plaguing this marketplace,” Rep. Hillary Cassel, D-Dania Beach, told reporters on Monday. “We are given the information and told what it means without having the real ability to look into it.”

Times/Herald staff writers Ana Ceballos and Mary Ellen Klas contributed to this report.