Governor Ron DeSantis has signed a new property insurance bill into law. The goal behind the measure is to cut down on litigation and stop rising insurance rates, but some question whether the changes will benefit consumers.
Even before he signed it, Governor Ron DeSantis was talking up the new property insurance law. During an Enterprise Florida Board of Directors Meeting Governor DeSantis said he thinks the changes will help keep costs down.
"We want this to be affordable for homeowners we don’t want it to be something that’s just kind of a pot for litigation," DeSantis. "And that’s really what was happening in Florida I mean huge proportion of the money was going to litigation expenses."
The legislation cuts down on what many have been calling bad actors in the insurance market that were fabricating claims that would lead to increased litigation costs for the company. In turn, the insurance company would request and receive a rate increase. In the past, many attempts to curb bad actors didn’t actually penalize those who committed the acts. Bradenton Republican Senator Jim Boyd says this measure will.
"Addresses fraudulent and abusive roof claim activities by prohibiting contractors from soliciting home owners through political advertisements, and there’s penalties for that if they do," Boyd said. "Prohibiting public adjusters and contractors from offering inducements to the residential property owner to file an insurance claim for roof repairs, again penalties if they do."
The new law also shortens the timeframe for filing claims. It requires insurance claims to be filed within two years and an additional year for supplemental claims. The limit previously for hurricane insurance claims was 3 years. Fort Lauderdale Democratic Senator Gary Farmer worries the changes could hurt consumers. He says people file lawsuits when insurance companies won’t pay their claims.
"Homeowners don’t want to file a lawsuit period. They don’t want to file a lawsuit; they don’t want their contractor filing a lawsuit on their behalf," Farmer said. "They worry about their rates being raised if they do so, they worry about their policy being dropped."
Dania Beach Democratic Representative Evan Jenne doesn’t like the changes either he thinks its focus is on helping the businesses.
"I think the bill stunk and it still stinks," Jenne said. "So it’s a bill that’s really meant to put as much money into insurance companies' pockets as humanly possible.
Jenne believes the law should have included a provision that required property insurance rates to decrease by more than 6 percent. He tried to amend the bill to do so but it wasn’t approved.
"That’s what we heard from the sponsors both in the Senate and the House, that this bill was going to drive down rates, it was going to drive down rates," Jenne said. "And when we asked them to put their money where their mouth is they roundly rejected it."
But Boyd says the goal behind decreasing litigation is to keep more money within the companies so they can be more stable. Currently, businesses have been leaving or cutting back on doing business in Florida because of the liability of spending money on litigation. That leaves means there aren’t a lot of choices in Florida’s insurance market, and many homeowners have to depend on Florida’s insurer of last resort, state-backed Citizens Property Insurance.
Corporation President Barry Gilway believes changes in the legislation will eventually help the policyholders.
"The more financially solid the insurance companies are the more they will want to write business the healthier they will be and it’ll open up the marketplace," Gilway said. "If they open up the market and they're more competitive on the business. Then you’re going to find companies competing for business again."
The more companies compete for business the lower they will begin to go on rates. How quickly that’s expected to happen is unsure. But DeSantis says he expects more changes will be needed in the coming year.
"I think the legislature did a by in large a pretty good job on addressing it but we’re probably going to have to do more going forward, so we will see what happens there," said DeSantis.
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