Florida's new laws on property insurance and condo safety may not give homeowners relief and calm troubled markets
When Lynn Haven resident Tori Lambeth bought her first home in 2019, it felt right. The payment—mortgage, taxes, and insurance—was perfectly affordable. But every year since the purchase, insurance costs have risen.
“We were paying $1,360 and now it’s $1,586 a month because of our home insurance and flood insurance," Lambeth told WFSU.
“I tried to shop around to see if I could get my property and flood insurance lowered, and the couple of companies that called me back, it was actually higher than what I’m paying. We also found out that we are underinsured," she said.
Underinsured means Lambeth didn’t have enough insurance to cover a full house replacement should hers be destroyed.
Lambeth said she’s having to watch her expenses closely as her mortgage and insurance costs keep rising. The insurance industry blames the current market problems on roofing fraud and lawsuits.
Gov. Ron DeSantis has approved new laws the state hopes will calm a chaotic property insurance market, and eventually lead to rate decreases for homeowners. But some lawmakers and industry analysts worry the packages don’t deliver relief fast enough and don’t go far enough for property owners to see a difference.
The property insurance crisis is so dire, that DeSantis ordered a special legislative session to address it.
Broward Democratic Rep. Robin Bartleman says she supported this extra lawmaking session because of an elderly constituent on Social Security who can no longer afford his homeowner premiums. And, for her friend–-a single mom who was dropped by her insurer.
“I can’t go home and say I did nothing," said Bartleman.
"I have to tell you this; this is not a partisan issue. We all have to go home and look at our neighbors. We are all in the same boat in the state of Florida.”
This is the third time in the past three years state lawmakers have tried to contain the state’s worsening property insurance crisis, but rates continue to increase by double-digits and more insurers are going bankrupt. Three have failed since February.
Senate bill sponsor Jim Boyd, R-Bradenton, says he hopes homeowners will feel some of the benefits soon. But he says many of the changes will take a while to have an effect.
“Sadly it is going to take a little bit of time, but we believe firmly will create that opportunity for homeowners to save money over the course of the next couple of years,” he said.
Boyd says a few of the provisions could lead to short-term rate reductions for homeowners. There’s a new, $2 billion reinsurance fund for hurricane losses insurers can tap into, faster. It requires insurers who participate to pass their savings to consumers. Homeowners can also get $10,000 grants to shore up their homes against hurricane damage, and there’s a two percent deductible option for roof damages.
Insurers have pointed to fraud in roofing claims as a cost driver, and property owners are having to replace roofs around 10 years old, when the average lifespan of a roof is around 20-25 years, just to keep their insurance.
Paul Handerhan with Federal Association for Insurance Reform says he believes the legislature could have gone further to add measures that could have provided more immediate help to consumers. He argues lawmakers could have paused a 25% surcharge insurers have to pay when accessing reinsurance from the Florida Hurricane Catastrophe Fund, which could have sent about $300 million to ratepayers. The fund also recently increased rates by more than 12%.
“So in my mind when we’re talking about ‘Ok, let’s have a special session because we’re trying to stabilize the market and provide rate relief for consumers,’” he said. “Those are two things they could have that would have provided immediate rate relief. The bill, while I think is good and like I said I’m appreciative - those benefits are not going to materialize for the next 18-to-24 months.”
The new law restricts attorney fees - a change the insurance industry has sought for years. Michael Carlson, CEO of the Personal Insurance Federation of Florida, says excessive litigation drives the market instability.
“We believe that homeowners should be able to sue their insurance companies if they have really been mistreated - if the insurance company has violated the terms of the insurance company," he said. "None of the provisions in the bill will limit that. I think what is being said by some opponents of the bill and it’s being characterized as access to courts is really more access to attorney fees.”
But Amy Boggs with the Florida Justice Association says she’s worried the new laws will make it harder for homeowners to go to court for help. Part of the changes says homeowners can’t bring bad faith claims unless the insurer breaches the contract.
“We feel like the bill has very little consumer protection in it," she said. "It’s really more of a corporate bailout for these insurance companies that mismanaged their funds and have mismanaged litigation and some other things.”
The legislation did get bipartisan support. But Democrats in both chambers introduced dozens of amendments, including rate freezes they argued would provide immediate relief to homeowners and renters facing a shortage of affordable housing in the state. They also attempted to address the impact of climate change on rates. But none of the amendments got Republican buy-in.
One area of total agreement on both sides of the aisle was the provision that requires high-rise condo buildings to be inspected regularly and funding to be set aside for repairs and maintenance. This comes in response to last year’s Surfside condo building collapse killing nearly 100 people. It was added late to the special session after negotiations between House and Senate leadership produced an agreement.