House Looks To Stabilize Insurance Market

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Tallahassee, FL - With homeowners facing increasing premiums and insurers dropping policies, the Florida House on Wednesday approved a plan aimed at shoring up the state’s property-insurance system.

But legislative leaders will have to reach agreement this week on a final version of the bill (SB 76), as the House and Senate have taken far-different approaches to issues such as trying to rein in roof-damage claims. The annual legislative session is scheduled to end Friday.

Rep. Bob Rommel, a Naples Republican sponsoring the House version, said lawmakers need to take action or homeowners’ premiums will continue to soar.

“If we do nothing, they will double in two years,” Rommel said. “If we do nothing, they will double again in two years.”

But Democrats criticized the House plan, saying it offers no guarantees that premiums would decrease.

“When do we say enough is enough and hold insurance companies in Florida accountable?” Rep. Emily Slosberg, D-Boca Raton, said.

Lawmakers are considering changes against the backdrop of regulators last year signing off on dozens of rate increases topping 10 percent. Also, as the insurance market has tightened, the state-backed Citizens Property Insurance Corp. has gained more than 120,000 policies during the past year.

The insurance industry points to problems such as litigation costs and questionable, if not fraudulent, roof-damage claims. Also, officials argue that Citizens Property Insurance, which was created as an insurer of last resort, often charges lower premiums than private insurers.

Part of the House plan would allow larger annual rate increases in the future for Citizens customers. Such increases currently are capped at 10 percent, but that limit would be gradually raised to 15 percent.

Also, the plan would prevent contractors from soliciting homeowners to file insurance claims, including offering incentives to homeowners. That part of the bill is intended to curb roof-damage claims. 

In addition, the House plan would try to limit fees of attorneys who represent homeowners in lawsuits against insurers. That includes creating a formula that would look at how much money is awarded in court judgments and how much money was offered by insurers to settle claims before the lawsuits.

But the Senate version, which was approved by the Senate early this month, has substantial differences on issues such as roof-damage claims.

That includes creating what is described as a “reimbursement schedule” that would allow insurers to sell policies that would provide reduced payments for repairing or replacing roofs over 10 years old. For example, insurers could reimburse 70 percent of the costs for metal roofs over 10 years old and 40 percent of the costs for concrete-tile and clay-tile roofs. The change would effectively shift more costs to many homeowners when they have roof damage.

Rommel and House Insurance & Banking Chairman Nick DiCeglie, R-Indian Rocks Beach, said Wednesday the House bill is designed to bring stability and increase competition in the insurance market. House members voted 74-43 to approve the plan.

“As we attempt to stabilize this market, the ball is now in the insurance companies’ court,” DiCeglie said. “We are going to see if these rates go down. We are going to see if the market stabilizes. That is the attempt, and that is what we are trying to accomplish here.”

But Democrats blamed insurers for many problems in the industry, including lawsuits over claims.

“Any other industry whose business model was to gain revenue while intentionally not performing under contract would be prohibited from operating,” Rep. Michele Rayner, D-St. Petersburg, said. “Yet, this has become the standard practice for our insurance companies here in this state. They would rather deny, delay and litigate than pay legitimate claims.”

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