The legislative session in Tallahassee has ended. During this past legislative session lawmakers in Tallahassee had an objective of reforming Florida’s property insurance system. Consequently, property insurance was a big priority during the legislative session. Unfortunately, insurance companies, and not policyholders, are the big winners.
Senate Bill 408, virtually guarantees a 15 percent premium “reinsurance” increase for Florida policyholders who have no choice but to buy property insurance on their homes if they have an outstanding mortgage. This is a backdoor tax and fee increase that will hurt most homeowners, consumers and small business owners at a time with very high foreclosure and unemployment rates, and a fragile economic recovery under way.
Moreover, homeowners who have no choice but to buy property insurance from Citizens Property Insurance Corp. will likely get the annual 10 percent increase, which continues to be authorized by law.
This premium increase comes after six years of no hurricanes and when the property and casualty insurance industry has record profits. Profits for U.S. property and casualty insurers rose 63 percent to $27 billion for the first nine months of 2010.
Senate Bill 408 also contains many other provisions that are anti-consumer as well. The reason being is that, for instance, the insurance lobby was able to convince our lawmakers that they needed to shorten the time in which hurricane and sinkhole claims could be brought. Insurers have been dealing with a large amount of claims that date back as far as 2005 in the aftermath of Wilma and also a recent rise in sinkhole claims. Instead of five years to file a windstorm claim, the bill proposes a 3 year limitation.
If this bill becomes law, policyholders are certainly going to be affected. Not only will their insurance rates go up, but many legitimate claims are going to be denied because of this restrictive time period. Water and mold damage often take a few years to present itself. Under the new law, someone who notices mold damage 3.5 years after the date of loss is out of luck. This provision does not take into account the fact that it can some time for damages to become evident. According to insurers, this provision is needed to curb fraud.
The bill also allows insurers to provide “additional or supplementary” information to the state without requiring top officers to certify that the data backing up their claim for a rate increase is truthful. Basically, this provision enables insurance companies to freely commit a fraud while they argue that time periods need to be shortened because of fraud. This is certainly a double standard.
Another troublesome provision of this bill is the fact that for people who pay for replacement cost insurance, in cases of hurricane repairs, homeowners will have to pay for some repairs in advance and hope to be reimbursed by the insurance companies. Many families simply can’t afford this burden, or wait for the insurance companies to “drag their feet” to pay these claims.
Times are tough enough as it is for many in Florida. This bill only makes it tougher on all hard working Floridians and helps insurance companies raise are rates without any oversight and with reckless abandon to Florida as a whole.
At Alvarez & Barbara, LLP, we have considerable experience dealing with insurance companies and claims. If you’re having difficulty with an insurance claim, contact Alvarez & Barbara, LLP to discuss your claim in greater detail today.