Florida Tax Watch Calls for Renewed Tax Breaks for Home Hardening Efforts

Florida Tax Watch, a nonprofit government watchdog in operation for 45 years, is urging state lawmakers to expand wind-mitigation tax breaks for homeowners struggling with higher insurance premiums.

The group this week posted an analysis of the Florida property insurance market and said that recent years’ legislative reforms are showing promise in reducing litigation and stabilizing the market – but more work is needed.

One of the few specific recommendations in the report calls for more home-hardening considerations. A sales-tax exemption on impact-resistant doors and windows expired at the end of June, the report noted.

“State policymakers should consider extending the program or establishing a longer program to encourage home hardening among all homeowners,” the report said. “Home hardening helps prevent future damage, thereby limiting risk for insurers and, in turn, limiting the growth of premiums,” the group noted.

The report stopped short of calling for an expansion of the highly popular My Safe Florida Home and My Safe Florida Condominium programs, which have been provided with more than $200 million in state funds to retrofit residences to make them more resistant to storms. A Florida State University insurance professor has said the programs are effective and he has argued that much more funding is needed. A number of other states have created similar mitigation-grant programs.

The Tax Watch report also noted that with rising seas and an expected increase in hurricanes and other storms, perils will only grow in coming years.

“Sixty-four thousand residential properties— amounting to $26 billion in value and contributing $350 million in annual property tax revenue—will be highly vulnerable to flooding by 2045,” the authors noted. “Increased risk will increase insurance premiums. Florida must find a way to establish long-term stability for the property insurance market; otherwise, the high cost of insurance will drive many Floridians out of the state.”

Policymakers should also consider ways to reduce insurance rates faster. And new ideas may be needed to tackle the continued insurance issues in Florida, the report said.

“Even though understanding the effects of previous legislation will take time—and currently show some promise—policymakers should remain vigilant to new opportunities to further enhance the resiliency of the property insurance market and address the critical need to reduce already exorbitant premiums,” the report concluded.

Florida Tax Watch was established in 1979 and is funded through donations and private grants. Dominic Calabro is president and CEO. The full report can be seen here.