Property insurance reform bills teed up for full hearing in Senate

JACKSONVILLE, Fla. — Florida lawmakers gaveled in for their special session to address the state’s property insurance crisis Monday morning and a Senate committee took a first look at and passed the two bills filed to help save homeowners money and prevent more insurance companies from going under.

During the five-hour hearing, Democratic lawmakers were critical of the fact that the proposed fixes won’t likely result in immediate relief.

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Most of the reforms in the two bills will take at least 18 months to result in lower rates for consumers, but the overarching message that both supporters and opponents agreed on, is that doing nothing is no longer an option.

Insurance companies have long blamed heavy litigation for driving up rates.

Florida makes up only 9% of the nation’s homeowners’ claims, but 79% of lawsuits.

“In the current litigation market, we cannot survive,” said Aram Megerian with the Florida Justice Reform Institute.

One of the bills that lawmakers are considering raises the threshold for attorney’s fees to be multiplied, creating a disincentive for attorneys to take up frivolous claims.

Democratic lawmakers were quick to ask bill sponsor Sen. Jim Boyd (R-Bradenton) how much ratepayers actually stand to save.

“I wish I could give you a number. I don’t know what that will be, but it will be a savings,” said Boyd.

State Sen. Lauren Book (D-Plantation) put forth an amendment that would have frozen rates to ensure homeowners wouldn’t continue seeing double-digit rate increases.

“Because I do believe it is irresponsible for us to go back home and not provide for some sort of immediate relief,” said Book.

But that amendment, along with six others, failed.

Republican state senator Jeff Brandes (R-St. Petersburg) took issue with a provision of the bill that would prohibit insurers from declining to cover a home solely based on the age of a roof if it isn’t more than 15 years old.

He argued it will expose insurers to more litigation, not less.

“Not another state in the country requires this, including California. So, we are out California-ing California,” said Brandes.

Boyd pushed back on Brandes’ concerns, arguing other litigation reforms in the legislation would prevent additional lawsuits.

“I think the 15-year roof life is a reasonable ask for the insurance carriers to give to the consumers because ultimately we’re trying to protect consumers in a variety of ways,” said Boyd.

In the end, the bill passed with only two “no” votes, one of which came from Jacksonville’s state Sen. Audrey Gibson.

For the most part, even those who were critical of some of the bill’s provisions agreed something is better than nothing.

“This market has stage four cancer. We have to treat it seriously like it does. I’m gonna support this bill today not because I think it’s going to solve the stage four, but because it’s better to start with a stage one even with a cigarette in its mouth and sitting under a heat lamp,” said Brandes.

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Some provisions in the bills have the potential to reduce rates in the near future, including $2 billion of reinsurance for hurricane losses.

There’s also a $150 million grant program that will provide $2 for every dollar that homeowners spend on storm-hardening their homes, up to $10,000.

But even with all of the reforms, Sen. Boyd said it’s likely things will get worse before they get better.

“Sadly, there are probably some carriers that are on the ropes that were on the ropes before we got here today and that will kind of play itself out in the market over the next several weeks to a month,” said Boyd.

Sen. Brandes argued that lawmakers could do more to try and prevent more insurers from going bankrupt.

“I’m also just concerned generally about how consumers are going to handle this. I think we need a lot more. We need a lot more right now,” said Brandes.

It seems unlikely we’ll see any major changes to the two bills passed out of committee Monday before the special session wraps up.

Sen. Boyd indicated the House and Senate are on the same page, and there won’t likely be any major conflicts between the two chambers in the coming days.

The full Senate will convene to take up the bills passed Monday at 10 a.m. Tuesday morning.

The House is set to gavel in at 1 p.m. Tuesday afternoon and take a first look at the bills in committee at 1:30 p.m.