Legislature Passes Modest Property Insurance Bill

TALLAHASSEE – Florida Legislators continued to reform the state’s property insurance laws, passing a bill on Wednesday during a special session. It is unclear what if any impact the legislation will have on skyrocketing prices, although homeowners who are insured by Citizens, the state-run insurance pool, will likely see rate increases as a result of the bill's passage.

The legislation, which passed along party lines, will create a $1 billion taxpayer-funded aid program for struggling insurance carriers while helping to curb lawsuits against those companies. But while the state will offer "reinsurance" to insurers, who partially blamed the sky-high cost of what is essentially their insurance, it does not come with a requirement to lower rates or compensation for top executives. Lawmakers notably offered no analysis to demonstrate that the program would positively impact rates.

Homeowners with Citizens Property Insurance policies will be required to purchase flood insurance and will not be able to renew their policies if they receive offers from private insurers that are within 20% of the cost of their Citizens premium.

The legislation will, for the most part, eliminate the requirements that property insurers pay the attorney fees of policyholders who win lawsuits over claims and end "assignment of benefits," a practice in which policyholders sign over their benefits to contractors, who seek payment from insurers. The practice was linked to scams in which homeowners were being incentivized to claim storm damage in order to get a new roof at their insurer's expense.

In another instance in which consumers are further disadvantaged, insurers will be able to market policies that require the policyholder to accept mandatory binding arbitration rather than being able to file suit against the carrier. It also reduces the time a policyholder can file a claim, from two years to one.

As far as consumer benefits, the legislation will reduce the timelines for insurance companies to pay or deny a claim from 90 days to 60 while reducing the time frame to conduct a physical inspection from 45 to 30 days.