Nearly 70,000 Floridians are set to lose their home insurance just ahead of hurricane season, with insurer FedNat set to shed policies to stay afloat.
State lawmakers will be back in the Capitol starting Monday to try and address the growing crisis, but there are a lot of cooks in the kitchen, and they all have competing interests.
Florida’s property insurance crisis has been brewing for years, and even with reforms passed in recent years, lawmakers have been unable to stop the bleeding.
They’ll have one week to perform emergency surgery starting Monday, but it won’t be easy.
State Sen. Jeff Brandes (R-St. Petersburg) has made property insurance reform his mission during his time in the Florida Legislature.
“The litigation economy is driving the rate increases in Florida. What is going on today is you and I buying our neighbors a brand-new roof and we’re paying for it in higher insurance premiums,” said Brandes.
He argues incentive structures need to be changed, to reduce frivolous lawsuits.
“Almost 80% of all lawsuits in America on property insurance happen in Florida and that’s what’s driving it. The payouts to attorneys, the amount of money these attorneys are making at the expense of homeowners,” said Brandes.
Farah & Farah’s attorney Andreas Study pushed back, arguing attorneys don’t shoulder all the blame.
“We’re in a scenario where unfortunately it’s not a very consumer-friendly environment and we’re seeing a lot of delays, delay, delay, and underpay from the insurance community,” said Study.
Study told us that he wants to see lawmakers take a balanced approach to lower premiums, and not pin the blame on attorneys, contractors, or insurance companies alone.
State Rep. Angie Nixon (D-Jacksonville) isn’t optimistic that will happen.
“I know who is padding the campaign coffers of the Republicans and just based on what has been happening these past few years with the legislature, they don’t look out for Floridians. They look out for big business,” said Nixon.
One reform that appears to be building some bipartisan support is lowering the cost to buy into the CAT Fund, which could lower reinsurance rates for insurance companies and result in lower rates for consumers.
But Sen. Brandes told us he anticipates any reform passed next week won’t directly impact consumers’ wallets for at least 18 months.
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