Florida Governor to Sign Property Insurance Measure But Says State Needs to Do More

Florida Gov. Ron DeSantis said that he will sign recently-passed legislation addressing property insurance costs and roofing contractor practices while adding that he believes that the state needs to do more to curb excess litigation and improve the insurance market.

The measure he said he will sign attempts to solve some of the issues plaguing the state’s homeowners insurance market in which insurers lost more than $1.5 billion last year. Consumers are facing double-digit rate increases, restricted coverage, or having to turn to the state’s insurer of last resort, Citizens Property Insurance.

DeSantis revealed his intentions to sign the measure during a meeting of the Enterprise Florida board of directors. He said that he wants to see “manageable premiums” and a “stronger private insurance market,” according to the Orlando Sentinel.

He said he thinks the legislature did a “pretty good job” addressing the insurance market but that the state is probably going to have to do more.

The governor’s office told Insurance Journal DeSantis had not yet signed the bill as of late morning.

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Some stakeholders agree with DeSantis that more needs to be done to lower costs and reduce litigation, citing the omission of two provisions the insurance industry said were essential. Other policymakers are optimistic that the measure as passed will still have a positive effect.

The legislation, Senate Bill 76, which passed on the last day of the legislative session session, includes changes to the state’s one-way attorney fee statute, the eligibility and glidepath of Citizens, and the deadline to file claims. It also places new requirements and restrictions on roofing contractors.

But two provisions the industry and experts identified as critical to addressing cost drivers and stabilizing the market were left out of the final bill — the elimination of the state’s attorney fee multiplier and a provision allowing insurers to implement policy language to mitigate roof replacement costs. The provisions were sticking points in both legislative chambers.

Sen. Jim Boyd, also an insurance broker and owner of Boyd Insurance & Investments in Bradenton, Fla., acknowledged that what passed didn’t have everything he or the industry wanted, but he is confident what did pass will make a difference.

“Rates aren’t going to go down tomorrow, of course,” Boyd said. “But I firmly believe this will have a definite downward impact on what has been continually rising homeowners rates in Florida … I really, truly believe we have done a lot of good toward getting at the root causes of the problem.”

Sen. Jeff Brandes, who co-sponsored the legislation, voted to pass the bill but said it was only a “40% solution for what is needed in Florida to bend the cost curve. Hopefully, it stabilizes rates, but really will ultimately do nothing to actually lower them,” he told his Senate colleagues.

“In my view, the most important provisions are the ones that didn’t get in it,” said Joseph Petrelli, president and founder of ratings analysis firm Demotech, which rates more than 40 Florida domestic insurers

“It’s a watered-down bill that won’t restore market stability. It will not curb rate increases,” agreed American Integrity CEO Robert Ritchie. “Everybody is set up for these expectations and everybody’s going to be mad at each other.”

The insurance measure was one of 13 bills sent to DeSantis yesterday for signing. After signing by the governor, the legislation would take effect July 1.

In its key provisions, the legislation:

• Changes the eligibility, rate glidepath and actuarily sound rate indication for Citizens Property Insurance Corp.
• Replaces the one-way attorney fee-statute to make the recovery of attorney fees and costs contingent on obtaining a judgment for indemnity that exceeds the pre-suit offer made by the insurance company.
• Reduces the claims deadline on all claims to two years from the date of loss, except for on supplemental claims which will have an additional year.
• Requires plaintiffs to file a pre-suit demand at least 10 days before filing a lawsuit against an insurer that includes an estimate of the demand, the attorney fees and costs demanded and the amount in dispute; disallows pre-suit notices to be filed before the insurance company can to make a determination of coverage; and allows an insurer to require mediation or other form of alternative dispute resolution after receiving notice.

The bill also makes several changes to tackle what insurers claim has been an explosion of roofing claims and litigation, including making it illegal for roofing contractors or any person acting on their behalf to make a “prohibited advertisement,” including an electronic communication, phone call or document that solicits a claim. Offering anything of value for performing a roof inspection, an offer to interpret an insurance policy or file a claim or adjust the claim on the insured’s behalf will also be prohibited. Additionally, contractors are prohibited from providing repairs for an insured without a contract that includes a detailed cost estimate of the labor and materials required to complete the repairs. Violations could result in fines of $10,000.