Gov. Ron DeSantis has signed legislation that aims to help stabilize the struggling Florida property insurance industry, crack down on frivolous home insurance claims and fight skyrocketing insurance premium costs.
The legislation, authored by Rep. Jay Trumbull (R-Panama City) and Sen. Jim Boyd (R-Bradenton), was approved by the state Legislature during a special session last month. The reforms come in the wake of multi-year financial losses sustained by Florida insurers due to what many industry observers say has been a wave of abusive litigation as well as a series of major hurricanes.
In an effort to put some downward pressure on property insurance rates, Senate Bill 2D provides $2 billion in reinsurance cost relief for insurers as well as $150 million to help homeowners make their homes more resistant to storm damage and earn premium discounts in the process.
The reforms signed by DeSantis on May 27 also aim to reduce the number of fraudulent roof replacement claims filed in the state and restrict the assignment of attorney fees in property insurance cases. In addition, new restrictions will be placed on the use of attorney fee multipliers by courts, which can lead to higher claims payouts and higher premium costs.
“Florida’s property insurance market is facing systemic challenges,” Kathy Colangelo, president of the Florida Surplus Lines Association, said in a statement emailed to the Florida Record. “Rising insurance costs and decreasing availability are due to a number of compounding factors, but chief among them is rampant lawsuit abuse.”
Supply-lines insurance refers to insurance alternatives for consumers with unusual or high-risk needs. These may include insuring older coastal homes, yachts or a day-care facility.
“As we head into hurricane season, the importance of preparing for weather events underscores the need to stamp out man-made problems that harm property owners and inhibit their ability to procure necessary coverage,” Colangelo said. “We’re thankful for the strides made during the special session.”
The approved legislation also calls on insurers to provide consumers with timely explanations when they deny or partially deny claims and to make the claims-adjustment process more transparent.