Editorial | Time to deal with property insurance problems

After failing to deal with the issue during the 2022 session, the Florida Legislature will hold a special session in May to search for a solution to the current crisis in the property insurance market where rates continue to soar, customers are being dropped and property insurance companies are either going belly up or threatening to do so.

During the 2022 session, various reforms were proposed, but none gained sufficient traction to pass both the House and Senate, and the session ended without meaningful legislation, even though two property insurance companies filed for bankruptcy in March, Progressive Insurance has announced it is dropping 56,000 policies, and a dozen companies including the Florida Farm Bureau will not renew thousands of policies.

One of the major sticking points for getting new reforms across the finish line and into law was a desire to see what impact the reforms enacted in the 2021 session would have. During that session the legislature passed a bill that among its provisions limits the ability of contractors and public adjusters to provide incentives for consumers to file insurance claims for roof damage

One of the important drivers in the increase in costs for insurers has been fraudulent claims for roof damage encouraged by unethical roofing companies and public adjusters. The 2021 legislation was aimed at limiting or ending this abuse.

While these reforms may have long-term impacts, the reality is that the Florida property insurance market remains unstable. This led to an effort by some members of the legislature to get a special session. However, this effort failed when it did not get sufficient support from other legislators, including Rep. Ralph Massullo, who was one of five senators to vote against a special session, apparently wishing to give the 2021 reforms time to work.

However, as this bill failed to get sufficient support in the legislature, the continuing crisis got the attention of Gov. Ron DeSantis, who has called for a special session in May to address property insurance issues.

We strongly endorse this special session, and hope that instead of tinkering with reforms that only marginally address the problem, our legislature will take a hard look at the overall insurance industry. This should include examining drivers for increasing costs, reasonable methods for controlling costs, and the effectiveness of reforms in other states. The goal should be to enact policies and practices that are fair and beneficial to both insurance companies and consumers.

Florida needs a healthy property insurance market, one that gives consumers choices and one that provides insurance companies the opportunity to earn a fair return on their investment and at the same time protects consumers from abusive and unfair practices by insurers. This is not an easy or simple task, but it is one that needs to be accomplished to create a healthy market that is fair to insurers and the insured alike.