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DeSantis expects legislators to make changes in property insurance system this year

 Florida's insurance market is vulnerable to hurricane damage, such as in Hurricane Michael.
News Service of Florida
Florida's insurance market is vulnerable to hurricane damage, such as in Hurricane Michael.

Gov. Ron DeSantis expects lawmakers will make changes in Florida's troubled property-insurance system sometime this year, at the latest after the November elections.

DeSantis did not include property insurance issues as part of a special session that he called Tuesday on congressional redistricting, leaving a decision on insurance to legislative leaders. But he said more legislative action is needed after lawmakers passed a property insurance bill in 2021.

The House and Senate could not reach agreement on an insurance plan during this year’s regular session, which ended March 14. Property insurers have sought major rate increases and shed customers to reduce financial risks, with two insurers recently placed into state receivership.

“There is going to be a need to do more legislative reforms. and we were very clear about that during the (2022) session,” DeSantis said during a state Cabinet meeting Tuesday. “You know, we may have another bite of the apple very, very shortly. But we need to just understand that there is going to be a need for the Legislature to do more.”

DeSantis told reporters after the meeting that any changes “will not wait until the actual session in 2023. It will be done this year.”

Insurance Commissioner David Altmaier told DeSantis and Cabinet members his office is taking steps to help address roof-damage claims, which insurers say play a major role in the financial problems. Also, he said the market is approaching a “critical couple of months,” as insurers purchase reinsurance — backup coverage that plays an important role in such things as hurricane claims.

“Reinsurance companies don't mind paying claims. They do mind paying claims that are three times as much as they thought that they were going to be,” Altmaier said. “That makes Florida not an attractive place for them to deploy their capital. And that's a bad outcome for consumers as well.”

In 2021, lawmakers approved changes that included a new formula to limit fees of attorneys who represent homeowners in lawsuits against insurers and a reduction from three years to two years in the time to file claims. They also passed a proposal aimed at preventing roofing contractors from advertising to spur homeowners to file insurance claims, though a federal court has blocked that part of the law on free-speech grounds.

The law also allowed larger rate increases for customers of the state-backed Citizens Property Insurance Corp., which is often able to charge less than private carriers.

Last week, Citizens President and CEO Barry Gilway projected his company could have more than 1 million policies by the end of this year, as it adds roughly 5,500 policies a week. As of last week, Citizens had 801,341 policies, up from 570,000 a year ago.

In this year’s session, the Senate wanted to take a more aggressive approach than the House in trying to bolster private insurers.

For example, the Senate proposed allowing new deductibles of up to 2 percent on roof-damage claims --- an outgrowth of complaints by insurers that questionable, if not fraudulent, roof claims are driving up costs. As an example, under the Senate proposal, a homeowner with $300,000 in overall coverage could have faced a $6,000 deductible to replace a damaged roof.

But the House rejected the idea, which would have led to increased out-of-pocket costs for homeowners who need to replace damaged roofs.

DeSantis said Tuesday he supported the Senate efforts.

"Now, what the Senate was working on, we were very supportive of that. But basically, that ran into a brick wall in the House,” DeSantis said. “And so, if the House is willing to entertain it, then they should absolutely do it.”

DeSantis added he’s optimistic about insurance changes after talks with incoming Senate President Kathleen Passidomo, R-Naples, and incoming House Speaker Paul Renner, R-Palm Coast. Both will move into the leadership posts after the November elections.

“I am pretty confident, through my conversations with both Senator Passidomo and Speaker-designate Renner, that this will absolutely become a reality,” he said.

Current Senate President Wilton Simpson, R-Trilby, told reporters on March 11 the Senate had a “pretty good bill” on property insurance and that there’s a chance lawmakers would be called back to Tallahassee as “we have many companies going out of business.” But those comments followed Simpson saying the property insurance changes made during the 2021 session need time to take hold.

House Speaker Chris Sprowls, R-Palm Harbor, made similar comments when asked about the insurance situation after the regular legislative session ended March 14.

“What I would also ask people to remember is that we just passed an incredibly significant reform last session,” Sprowls told reporters. “It did things like amend the attorney fee statute for the first time, I think, in 100 years.”

The special session on redistricting will be held from April 19 to April 22.

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Jim Turner - News Service of Florida