3 things need to happen to correct the struggling insurance market

Hanah Lopes

ORLANDO, Fla. – Many consumers are still struggling to find and afford property insurance.

Florida’s insurance market was already in crisis before Hurricane Ian, now Florida lawmakers are gearing up for the second special session on property insurance this year.

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Florida Sen. Jeff Brandes, D-St. Petersburg, says several things need to happen and they need to happen quickly, including restructuring how attorney’s fees are paid to try and cut down on what insurers call excessive litigation.

Consumers are concerned about two things — keeping their coverage and lowering their rates.

Ginger Singer says when she got a non-renewal notice that she was being dropped by her insurer, she was completely caught off guard.

“It was a total surprise to me,” Singer said. “And for them to say why they were not renewing the policy just blew me away. I’m like, ‘why, how can you do that?’” she said.

The company is “reducing hurricane exposure,” according to the letter, something we are seeing more and more in the Sunshine State.

“People need to be insured,” Singer said. “They need to know that if something terrible happens that they can recover financially, and still have a home,” Singer said.

The list of insurers going out of business or leaving the state has gotten longer and longer over the past two years.

In fact, the governor is calling for a special legislative session on property insurance later this year — the second of the year.

“All these sessions, it’s not rocket science,” Singer said.

Brandes has been in the Florida legislature 12 years, but is not running again because of term limits.

“I think you’re going to get things accomplished. The question is, is it enough?” Brandes said. “The industry as a whole has stage four terminal cancer right now.”

Insurers claim excessive litigation, roofing schemes, and the cost of reinsurance have driven up prices.

Brandes says the first thing the legislature should get rid of is one-way attorney’s fees,  where insurers pay consumers’ attorney’s fees after litigation.

“Seventy percent of the dollars paid out by the insurance companies last year went to the trial bar, 20% went to their defense cost and only 10% went to homeowners. There’s something wrong with the math,” Brandes said.

Then, the legislature should allow insurers to provide actual cash value on roofs instead of full roof replacements, Brandes said.

Finally, Citizens Insurance has to be addressed, Brandes said.

“The government insurer of last resort has become a predatory competitor in the state of Florida. Their prices in the Tampa Bay market and in Miami-Dade are 50% below the market price,” Brandes said.

Citizens has to increase rates to stabilize the market, he said.

“Understand how politically difficult it’s going to be for the politicians in Tallahassee to raise Citizens’ rates to where they have to be. Understand if you’re 50% below the market, that means you have to raise rates 100%, just to get back up to market price,” Brandes said.

Citizens ends up less expensive than others because other insurers can request rate increases from the Office of Insurance Regulation of 10, 15, 20% per year if they choose.

Those increases are often approved, because insurers would go under if they were not, according to the state.

Right now, Citizens is only allowed to increase a certain percentage per year until they reach 15% in 2026 and beyond, a spokesperson from Citizens told News 6.

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