Florida has a property insurance crisis on its hands, and families are hurting. Hardworking Floridians are facing skyrocketing inflation from Bidenomics, and now we are seeing insurers, like AAA and Farmers, flee the state, leaving folks with less choice and higher premiums. Here’s the reality: Floridians are being priced out of living their dreams in Florida, and the elderly are watching their retirement savings dwindle.
When I was governor, we aggressively worked to make sure Florida’s private insurance market grew so Floridians would be provided with more choice. Today, the opposite is occurring and with companies leaving the state, Citizens Property Insurance Corp., Florida’s state-run insurer of last resort has grown threefold since I was governor. According to the latest data available, Citizens currently has 1.3 million policies in force, up from fewer than 430,000 policies when I left office. This massive growth means that Citizens’ (aka the “Florida taxpayers”) share of the property insurance market has ballooned from 6% to 16% since 2018, with the private insurance market dwindling.
Here’s the truth that many won’t tell you: At its current size, Citizens cannot cover all the claims it is responsible for if we had a massive storm because it is no longer fully funded like it was when I left office. The only way that Citizens could pay all claims would be to either force higher fees on policyholders, force the state into new tax assessments on Florida families — or both. That is unacceptable. We have to ensure that if there is a hurricane, claims can get paid to victims without seeing new, high fees or new taxes as a result.
Right now, the average property insurance cost for Floridians is twice as high as when I left office. My greatest fear for Florida is that it becomes so unaffordable that families and businesses are forced to leave. As insurance premiums rise, low- and fixed-income families, like the one I grew up in, are at the greatest risk of being hurt.
Over the last five years, Florida’s property insurance market has gotten way out of control — it’s time for state leaders to take action, I urge them to start with three critical things:
1. Grow the private insurance market that increases competition and is responsive to Florida homeowners. This is not easy, but I did it, bringing back State Farm, which had quit on Florida the year before I became governor. It is imperative that as the private insurance market grows, state leaders continue the critical work each and every year to put measures in place to stamp out fraud and abuse which often leads to higher rates on customers, while making certain there is oversight on excessive rate increases.
2. Implement additional reforms on the private insurance market to ensure that Florida families are treated fairly, paid for their claims in a timely manner and guaranteed a transparent notification process regarding any changes in coverage. Right now, state law requires that insurance companies give policyholders notification of non-renewal 60 days before their policy is dropped. This should be expanded to at least 120 days. If you get dropped from your insurance, you could lose your mortgage. If an insurance company determines a customer no longer meets their criteria, there should be much more time for families to find options so they aren’t left stranded in fear they could lose their home.
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3. Shrink the size and scope of Citizens to again make it the insurer of last resort, drive down insurance costs and make sure that it’s fully funded and can pay every legitimate claim made by policyholders without forcing higher fees on policyholders, forcing the state into new tax assessments on Florida families, or both. New tax assessments from the state happened before I became governor, and it could happen again.
As your former governor, I know that regulating property insurance is a state issue. I had to deal with it when I was governor, nobody else came in to fix it. We did the hard work of fixing the problems, shrinking Citizens and increasing choice with greater competition that lowered rates. Now, the state is facing this problem again.
In 2009, before I was governor, State Farm had effectively left Florida’s property insurance market. This devastated our residents because they provided coverage to 1.2 million Florida families. When a massive company like that walks out, it only leads to increased costs on policyholders.
That’s why, when I took office, one of my first orders of business was to bring State Farm back. It required sitting down with them to identify the challenges they were facing in Florida and figuring out solutions. That ongoing communication process helped the state get to a place where State Farm and other insurers could provide reliable and cost-effective coverage for Florida families.
I know that the leadership at Citizens is working to shrink its policy load and has the expertise to get this done. I also believe that state leaders are serious about getting this problem under control, and are considering calling a special session to do whatever it takes to accomplish the three goals I outlined. This is not just common sense, its vitally important to the economic stability and peace of mind of millions of families throughout our state, especially our seniors. Florida families need to feel safe with their coverage. It must be affordable, and with the safeguards that if a bad day comes, they’ll be OK, not dropped like a bad habit by a company trying to save a buck.
The possibility of a hurricane impacting our state is a constant reality but it should not financially strangle Floridians or kill the dream of owning a home in our state. It does require a great deal of work, and it requires that the state get on it right away.
Republican Rick Scott represents Florida in the U.S. Senate. He served two terms as governor of Florida.