A new property insurance bill is in the works in Florida. Insurers are hoping the new bill will gain the support of new Governor Rick Scott. The new bill could be taken up by the state legislators in early 2011.
Earlier this year, the insurance industry supported a bill which addressed many non-hurricane-related cost drivers for insurers. This bill overwhelmingly passed through the state House and Senate, but was ultimately vetoed by the former governor.
Governor Crist vetoed the bill despite a plea from Insurance Commissioner Kevin McCarty that he sign the bill into law to cut down on some of the expenses that insurers say is making it hard for them to do business in Florida. Crist, however, called the legislation “anti-consumer” and said it was wrong to allow for rate hikes during tough economic times.
The vetoed bill changed the time period to file claims resulting from hurricane damage. Rather than five years, the bill proposed a 3 year time limit. It proposed regulation of public adjusters. It also gave the Office of Insurance Regulation more oversight over affiliated reinsurers and addressed expedited filings for the cost of reinsurance.
The bill that passed this past year did not address sinkhole claims, which is becoming a bigger and bigger concern for carriers. The final bill also did not include a change in how much in replacement costs insurers must initially pay for personal items. There will likely be a push to address both those issues in a new bill.
Although we haven’t been hit by a substantial hurricane in the last 5 years, nearly 40 percent of property insurers posted surplus losses the first six months of this year. Almost 60 percent of insurers reported underwriting losses.
There is also an initiative specific to Citizens, the State’s insurance company which was created to fill the void created by insurers who stopped insuring homes in Florida. The initiative supposedly proposes changes which would make it harder for residents to get coverage from the last-resort insurer. Citizens has grown to become the second-largest property writer in the State. It has an 11.4 percent market share. State Farm is the largest with a 12.8 percent market share.
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