Florida insurance bills clear committee, move to Senate

The Florida Legislature on Monday began a special session focused on fixing the state’s turbulent property insurance market, advancing sweeping legislation to create a $2 billion reinsurance fund and place new rules around attorney fees and coverage denials as lawmakers attempt to stabilize a market plagued by rising rates and insurer insolvencies.

The Senate Committee on Appropriations approved the measures on near-unanimous votes. The bills now move to the full Senate.

Through hours of committee debate, the Republican sponsor of the proposals acknowledged that they would not immediately drop rates for homeowners but maintained the legislative package is necessary for the long-term health of the state’s market.

"It’s very serious. Some carriers are on life support, some are about to pull the plug; others are in critical condition. And without reform will go to life support and or pull the plug. So I don’t know that we could be in any worse a position as Floridians than we are," said Sen. Jim Boyd.

The special session comes as Florida’s second extracurricular meeting of the legislature in recent months, following the failure of the GOP-controlled statehouse to pass insurance proposals earlier this year during its regular meeting period. There is also increasing urgency for lawmakers to address problems in the state’s market ahead of the looming hurricane season, which in previous years has brought devastating storms to Florida, such as the Category 5 Hurricane Michael in 2018.

The proposals would create the $2 billion Reinsurance to Assist Policyholders program for insurers to purchase insurance to help insulate themselves from risk. In order for an insurer to access the fund, it would have to reduce policyholders’ rates.

The bills would forbid insurers from automatically denying coverage because of a roof’s age if the roof is less than 15 years old. Homeowners with roofs 15 years or older would be allowed to get an inspection of their condition before insurers deny them coverage, under the bill. If an inspection shows that a roof has at least five years of life remaining, insurers can’t refuse to issue a policy only based on the roof’s age under the proposed legislation.

If a roof is more than 25% damaged but already complies with the state’s 2007 building code, it would only have to be repaired instead of replaced under an exemption to the building code that the proposed legislation creates.

Another measure would provide grants worth up to $10,000 each to retrofit homes, so they are less vulnerable to hurricane damage. To qualify, properties would have to have insured values of $500,000 or less, be homesteaded, constructed before 2008, and located in areas where wind speeds from storms can exceed 140 mph (225 kph). Homeowners would get $2 from the state for every $1 they invested in mitigation efforts.

The legislation also seeks to limit various attorney fees in insurance-related cases, which insurers blame for much of the rate increases for policyholders. Supporters of the legislative package have frequently noted that Florida accounted for 9% of all insurance claims filed nationally but nearly 80% of all the property insurance lawsuits.

The bills would allow for more state oversight, so regulators can spot trends, analyze reasons and try to prevent the future failure of insurers. The insurance industry has had two years of underwriting losses exceeding $1 billion each year, according to the office of Florida Gov. Ron DeSantis, a Republican. Several insurance companies have either gone insolvent, required midterm cancelations, are in liquidation, or have stopped writing new business since 2021, the governor said in his proclamation calling lawmakers back to the Capitol.

The special session is set to run from Monday to Friday.