We, the Florida Legislature, passed a property insurance market bill because the market needs fixing. Florida consumers are experiencing non-renewals and hikes in insurance premiums due to natural disasters, litigation, and insurance companies going bankrupt or deciding to no longer do business in Florida.
From 2009 to 2015, we had a thriving insurance market because major hurricane activity was limited. Florida insurance company executives couldn’t predict the next five hurricane years, so they didn’t plan financially to stay solvent.
The partisan bill aims to make Florida a desirable place for property insurance companies to do business in an effort to achieve economic equilibrium, which means property insurance should be more affordable with optimal services due to market competition encouraging fair prices and good services.
I believe we can reach a place of longer-term economic equilibrium here in Florida, but Florida residents deserve relief sooner rather than later. The bill provides no immediate relief, but could potentially contribute to long-term market stability. Yet it is unbalanced and more aimed at providing immediate relief to insurance companies, but not to consumers.
There are good parts in the bill that require insurance companies to review claims and process them more quickly. To limit fraud, consumers also have stricter deadlines for reporting complaints. It also changes the benefit allocation arrangement so that construction service price assessments can be brought more in line with fair market value.
The only part of the bill that made it difficult to support it was the discontinuance of consumer legal representation that the insurance company could pay for if legal representation won the plaintiff’s case by more than 50% above the amount of the claim. pre-trial settlement. In the previous session, Senate Bill 76 was very helpful in mitigating unnecessary lawsuits. Since its adoption, we have seen a 30% decrease in disputes surrounding claims.
I believe that discouraging litigation that does not provide consumers with beneficial support for legitimate claims helps make insurance more affordable. We should have laws like Senate Bill 76 that prevent a lawyer from taking a case with $15,000 for damages offered to only get a total of $16,000 plaintiff’s offer before the court because anyone can agree that this type of litigation is pointless.
New bill passed December 14, 2022 now requires all plaintiffs to pay attorney’s fees and associated fees up front, PFS (proposed settlement), or plaintiffs pay attorney’s fees and associated fees on the amount granted. to repair their house once they win the case.
For example, if your wind damage caused $20,000 in damages and you hire an attorney to litigate your claim because it has already been denied or greatly reduced, your attorney fees will be paid on the $20,000 $ if you win. Another element of the bill that I couldn’t support was the requirement for all citizens’ insurance policyholders (including those who don’t live in a flood zone) to carry flood insurance. ‘by 2027. In addition, this bill requires that holders of a citizens’ insurance policy change their insurance. companies if there is comparable insurance on the private market at less than 20% of the current cost of their policy.
We will enter the 2023 session introducing bills and amendments to continue working on the instability of the property insurance market with bipartisan efforts. Even though we have provided $1 billion to the insurance industry, I would like us to consider providing funds tied to a temporary freeze or reduction in property insurance rates so that consumers can benefit immediate relief.
We also need to think about how we can use public money to subsidize catastrophic events when insurance companies don’t have the financial capacity to serve their customers. To stabilize our property insurance market in Florida, we need a market where insurance companies can make an economic profit from doing business here, but we also need to protect consumers to make sure they have the protection of the goods they pay for and the ability to hold insurance companies liable in cases where it is more advantageous for the insurance company to deny a claim and go to court than to pay a claim.
Democrats voted “no” on the bill in an effort to negotiate much-needed changes to address Florida’s property insurance challenges. We are committed to working with leaders to review our ideas in the next session and ultimately help Floridians with immediate and longer-term relief.
Gallop Franklin II is a member of the Florida House of Representatives representing District 8.
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