TALLAHASSEE, Fla. – Florida is the most expensive state for homeowners insurance premiums in the country, according to the Insurance Information Institute.
Triple-I says the average homeowner insurance policy has gone up 102% over the last three years. At the current average cost of $6,000, it’s three-and-a-half times the U.S. national average of $1,700.
So it shouldn’t be surprising that when News 6 asked its viewers and readers what issues should be a priority for lawmakers in the Florida Legislative Session, which starts Tuesday, property insurance was top of everyone’s mind.
“Housing insurance cost should be lowered. It has been increased more than double for most which means many of us are having to use our savings or move out of Florida altogether...or worse...become homeless,” said one reader.
“Lawmakers should do more about property insurance costs. Condo association property insurance specifically. Condo associations will fail and people will be forced to move out of Florida due to the high premiums,” said another.
“Insurance rates. Why are the State leaders letting this continue to affect homeowners?” said a third.
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State lawmakers whom News 6 spoke to say they hear them, and all the lawmakers are hearing them.
“My constituents and every single member of this legislature, we have constituents that are reaching out to us via email, via phone calls,” said State Sen. Nick DiCeglie, R-St. Petersburg.
But if Floridians are looking for lawmakers to make moves this session that bring property insurance costs down fast, they may be sorely disappointed.
What lawmakers have already done
LAWSUIT REFORM
The main reason lawmakers are not planning to make any major moves on property insurance during the session, they say, is that they have already done quite a bit, but it will take the market a while to sort that out.
“What I’ve been told in is that because of the tort reform that was passed the last time that they are already seeing some benefits from that and that they want to wait another year,” said State Sen. Linda Stewart, D-Orlando. “To see the rates come down based on what they did. So they don’t want to go in and start doing anything else right now.”
Lawmakers say that the residents won’t see fixes right away, but as insurers gain more confidence in the Florida market thanks to recent legislation, rates are expected to go down in the long term.
“I will say that there are good indicators that the reforms that we passed are beginning to work. It’s not going to have an immediate impact on the rates just yet,” said DiCeglie, who is vice-chair of the Senate Banking and Insurance Committee. “But certainly the tort reform, and obviously the many provisions in the various property insurance reforms during special session and otherwise, there are there are some good, good indicators that it’s going to eventually stabilize the property insurance market.”
Over the last three years, Florida legislators have passed 10 bills specifically to deal with issues related to property insurance. In 2021, the legislature passed a bill to rein in lawsuits against property insurers over roofing schemes and other frivolous lawsuits.
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In 2022, legislators doubled down on reining in insurance lawsuits in two special sessions, with changes to how roofs are insured, banning contractors from encouraging homeowners to make a property insurance claim for roof damage, banning the use of assignment of benefits in property insurance claims, and reining in attorney fees in lawsuits.
Nearly 80% of the nation’s homeowners’ insurance lawsuits come from Florida, according to the Insurance Information Institute. By contrast, only 9% of all U.S. homeowners’ insurance claims are filed within the state.
A bill in 2023 further tried to restrict bad faith lawsuits by ending one-way attorney fees for lawsuits against insurance companies, and established requirements for labeling an insurance claim a “bad faith claim.”
While the rate of lawsuits being filed is leveling off, officials say there are still many claims in the pipeline under the old laws that have to be rectified before we will really see any big benefits from these changes.
MY SAFE FLORIDA HOME PROGRAM
Lawmakers also established the My Safe Florida Home Program, which is meant to help homeowners recover the costs of things like new roofs, impact-resistant windows, garage door updates and other “home hardening” projects. Doing these things could bring down the cost of property insurance, said Florida Chief Financial Officer Jimmy Patronis.
“I made the same improvements that the My Safe Florida Home Program empowers us citizens of Florida to do, my insurance rates dropped in half in less than six months,” Patronis said. “So again, when you have less of a risk, where you’re embracing the most stringent building codes, you will find savings.”
But the program is currently not accepting new applications, according to a note on the website. The Florida Legislature provided more than $176 million during a special session last fall to fund existing applications. The program says it won’t take any more applications until more funding is available. Lawmakers will look at adding funding this session.
A full list of the bills passed over the last two years are available on the My Florida CFO website.
Big causes remain
Other factors in the state’s rising property insurance rates are harder to rein in. One is inflation.
“If you have walked into a big box, hardware store and seeing the cost of a piece of plywood, it’s up probably four or five times more than it was four or five years ago. So, it costs that much more to fix a home and that is reflected in our increase rates,” said Lisa Miller, former deputy Florida Insurance Commissioner.
The other issue is the increase in not just natural disasters, but in severe storms that cause widespread flooding.
Chase Gardner, data research lead for digital insurance comparison platform Insurify, says insurers look at FEMA’s risk rating, which leads to higher rates too.
“There’s a really disproportionate number of people in Florida that are exposed to a higher risk of severe weather. And so we found in the Insurify 2023 home insurance report that residents who live in counties that are rated as at very high risk by FEMA, pay almost double per year in home insurance than someone who lives in just the average county in the U.S.”
What bills can we expect in the session?
There will be some attempts to tweak property insurance regulations in the session. DiCeglie is pushing a bill to create more reinsurance – the insurance insurance companies buy – for those companies (SB 1668). It piggybacks off a bill lawmakers passed in 2022.
“If we can stabilize the reinsurance market, when our domestic carriers purchased that reinsurance, they’re going to be forced to essentially pass those savings along to the consumer,” DiCeglie said.
Miller says providing more reinsurance to insurance companies will do much to stabilize the Florida markets because Florida’s reinsurance fund is unique and cheaper.
“The reinsurance piece of this is the piece we haven’t done much with,” Miller said. “The worldwide markets, Bermuda, London, Germany, Switzerland, they determine the rates and those rates get passed on to us, and I don’t blame them for charging the rates they charge. They’ve got to deal with this crazy weather. So they charge what they need to charge and I get that, but I think we can do some things with our reinsurance.”
Miller also wants to see the legislature act on Gov. DeSantis’ request in the budget to roll back two fees and taxes on property insurance coverage, like the 1% assessment on all homeowners ‘policies by the Florida Insurance Guaranty Association.
Miller says rolling back those fees, along with an exemption on the State Fire Marshal Assessment, would save policyholders $409 million.
DiCeglie says that is something they hope to make happen.
“I certainly support that proposal, we’ll see how things shake out here in the next 60 days,” he said.
Other bills would create assistance funds or rebate programs to help some people with insurance costs. Then there are bills to make more tweaks to Florida’s state-run insurance company, Citizen’s so that policyholders with higher-value homes pay a surcharge (HB 889).
“No offense to my high-value net worth friends,” Miller said. “But if you’re going to be in the government’s insurance company, you should be paying a higher rate than the rate you’re paying now, because Citizens Property Insurance rates on average, and you’ve heard the CEO of that company say this, are on average 50% cheaper than the private market.”
Stewart filed a bill (SB 500) to require new property insurers to carry more money so that the companies are in a better position to handle claims when there is a catastrophe. While Miller said the bill is a great idea, Stewart is not hopeful the measure will go anywhere. No companion to the bill in the Florida House was filed.
But Patronis says Floridians should not stop letting lawmakers know during the session that the issue matters to them.
“This is when we’re making the decisions that affect your household budget, and we like to make people happy,” Patronis said.
Will insurance premiums ever go back down?
Never say never. But the chances aren’t good.
“I don’t think rates are gonna go down dramatically,” Miller said. “We can’t change the weather. We can’t change inflation. Litigation is what litigation is, but we can try to do our best to stem some of these rate increases.”
What people are more likely to see is that insurance rate increases go down, even plateau, said Gardner.
“Unfortunately, with climate change projections which Florida is especially vulnerable to you know,” Gardner said. “I think the severe weather angle is unlikely to improve and the outlook that insurance companies have for the state is unlikely to improve anytime soon. So, with that regard, I think that’ll continue to drive prices upward.”
Is there anything Floridians can do themselves?
Patronis says now is a good time to call up your insurance agent and see what changes you can make that may reduce your policy.
“Go call your agent and find other solutions,” Patronis said. “There are other insurance products out there that are cheaper, that may be available to you, but it’s not going to come to you. You’re gonna have to ask for it.”
Miller, meanwhile, says to make sure your insurance company knows if you’ve made any changes that could lead to discounts. Also, don’t wait to make home-hardening changes if you can afford to.
“Insurance company loves it when you have a new roof. I got a new one last year and watched my rates go down 40%,” Miller said.
If you need help funding home improvements, Miller said to check with your county. Grants may be available using federal money to help low-income homeowners afford those improvements.
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