Business groups thanked Gov. Ron DeSantis Friday for signing a bill that they say will help to clamp down on both property insurance rate hikes and costly insurance litigation in Florida.
Groups such as the Personal Insurance Federation of Florida (PIFF) expressed gratitude to the state legislature for passing Senate Bill 76, even though two key components were jettisoned from the final version of the bill. The provisions removed from the bill would have eliminated what’s known as the attorney-fee multiplier, which adds to settlement costs, and allowed insurers to reduce the replacement costs of roofs based on age and the type of roof being replaced.
Michael Carlson, PIFF’s president and CEO, said the state needed to take action to reduce stress within the property insurance market while protecting consumers.
“For too long, bad actors have taken advantage of Florida homeowners, leading to a crisis in the property insurance market,” Carlson said in prepared remarks emailed to the Florida Record. “With SB 76 now law, Florida will be able to take several steps toward reform, reducing the cost of property insurance lawsuits that contribute to higher insurance rates.”
Though industry officials didn’t immediately respond to a query about the removal of the two previously included reforms, the Florida Consumer Protection Coalition said more work may be required in the future to mitigate rising costs of insurance coverage. Even so, the CPC expressed cautious optimism that the final version of SB 76 would be helpful.
Over the past year, several property insurers in Florida have moved to increase rates by double digits in order to cover rising costs that many in the industry attribute to bloated legal costs, fraud and recent hurricane damage.
SB 76 prohibits building contractors from soliciting homeowners through advertisements that encourage consumers to call on a contractor to file a property insurance claim over roof damage. It also places limits on contractors from performing roof inspections that lead to claim filings.
Violations of SB 76 that will be issued by the Department of Business and Professional Regulation may run as high as $10,000 each.
The new law will also make it more difficult for property owners to gain coverage from Citizens Property Insurance Corp., which was set up by the state legislature as the insurer of last resort. Homeowners will be ineligible to switch their policies to Citizens unless their current policy costs at least 20 percent higher than a comparable Citizens policy. Citizens’ current eligibility threshold for taking on new policies is 15 percent.