Legislature advances property insurance reform

The Florida Senate has taken up sweeping property insurance reforms after a set of bills cleared the Senate Appropriations Committee on Monday.

Lawmakers unveiled the bills late Friday, ahead of the start of this week’s special legislative session—which comes the week before the start of hurricane season. Among other things, the legislation allocates $2 billion for a temporary reinsurance fund, limits some attorney fees in insurance cases and prevents companies from denying coverage to homeowners with roofs that are less than 15 years old.

Supporters of the bills acknowledged that they were unlikely to bring immediate help for homeowners who have been hit by skyrocketing rates.

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The effort to prop up the insurance industry came as lawmakers said is a dire situation.

“It’s very serious,” said Sen. Jim Boyd, R-District 21. “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.”

Conny Edwards of Sunshine State Insurance Agency, which has served the Gainesville area for over 50 years, said he understands the struggle for insurance companies.

“Florida has 8% of the property coverage in the United States, but we have 80% of the litigation,” Edwards said. “There are unscrupulous contractors contacting homeowners promising free roofs, etc. if they will sign an AOB (assignment of benefits). This causes issues with homeowner companies and also individuals that sign the documents. Reinsurance has greatly increased, which has caused Florida homeowner companies additional expenses that are passed to consumers. All types of losses have increased, which has put a strain on homeowner companies.”

The F.A.I.A. (Florida Association of Insurance Agents) was hopeful that reforms passed in the 2021 Legislative Session would help stabilize the insurance marketplace.

Instead, litigation has continued with disregard for pre-suit notice requirements. Compared to the national average of 900, Florida had over 100,000 litigated property insurance claims in 2021. This has affected homeowners and insurers alike.

Edwards said customer education is key. 

“There are things that the customer can do, but you’ve got to find an agency that is willing to work with you and spend some time,” Edwards said. “The bad part about that is we spend the time and you get the business, but the business and the commissions we get don’t even pay the time spent. If we don’t keep that policy for two or three years, the efforts that we exerted—we don’t even get to break even on it.”

Sunshine State has represented many insurance companies and Edwards says that business today is “off the map.”

“(In the past) we’d get maybe one or two referrals a month that we were involved with working on,” he said. “Well, now, sometimes we’re getting two, three or four a day.” 

Florida’s “litigation economy” stands as the main contributor to the state’s insurance woes, according to a recent Insurance Journal report. 

Litigation frequency and severity represents an additional expense load of 17% (and rising) on all earned premiums for insurers in Florida compared with other catastrophe-prone states,” the report found. 

The special session is set to conclude on Friday. 


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