Special Session Pushes Property Insurance Package

The Florida Senate on Tuesday approved a sweeping legislative package meant to combat rising property insurance rates and other problems in the state's turbulent insurance market, creating a $2 billion reinsurance fund and writing new rules around coverage denials and attorney fees.

The Republican-controlled Senate approved the legislation after hours of debate. The proposals now await passage in the House, which is expected Wednesday.

The bills come as part of a special legislative session focused solely on property insurance. Lawmakers failed to pass insurance reforms earlier this year during their regular session, which was dominated by contentious partisan fights on bills involving race, gender identity, sexual orientation and abortion.

In debate Tuesday, Senate Democrats pushed to grant immediate rate reductions or freezes for property owners but their amendments were rejected by Republicans who argued the legislation was the best path to stabilize the market in the long term. GOP legislation sponsor Sen. Jim Boyd said the measures would not result in rate decreases before 12 to 18 months.

“My constituents, who I have spent quite a bit of time with over the last several weeks and months, are in desperate, desperate need, not for 18 months from now — today, tomorrow the next day, certainly before hurricane season,” said Sen. Lauren Book, a Democrat.

The proposals would create the $2 billion Reinsurance to Assist Policyholders program for insurers to purchase insurance to help insulate themselves from risk. In order for an insurer to access the fund, it would have to reduce policyholder’s rates.

The bills would forbid insurers from automatically denying coverage because of a roof’s age if the roof is less than 15 years old. Homeowners with roofs 15 years or older would be allowed to get an inspection before insurers deny them coverage. If an inspection shows that a roof has at least five years of life remaining, insurers can’t refuse to issue a policy only based on the roof’s age, under the proposed legislation.

If a roof is more than 25% damaged but already complies with the state’s 2007 building code, it would only have to be repaired instead of replaced under an exemption to the building code that the proposed legislation creates.

Another measure would provide grants worth up to $10,000 each to retrofit homes so they are less vulnerable to hurricane damage. To qualify, properties would have to have insured values of $500,000 or less, be homesteaded, constructed before 2008 and located in areas where wind speeds from storms can exceed 140 mph (225 kph). Homeowners would get $2 from the state for every $1 they invested in mitigation efforts.

“Obviously, you want to pay lower rates, but if you make improvements, you avoid damage in the first place, so that’s going to help,” Republican Gov. Ron DeSantis said at a Tuesday news conference in Havana, Florida. “I think these reforms are positive.”

The legislation also seeks to limit various attorney fees in insurance-related cases, which insurers blame for much of the rate increases for policyholders. Supporters of the legislative package have frequently noted that Florida accounted for 9% of all insurance claims filed nationally but nearly 80% of all the property insurance lawsuits.

The bills would allow for more state oversight so regulators can spot trends, analyze reasons and try to prevent the future failure of insurers. The insurance industry has had two years of underwriting losses exceeding $1 billion each year and several insurance companies have either gone insolvent, required midterm cancelations, are in liquidation or have stopped writing new business since 2021, the governor said in his proclamation calling lawmakers back to the Capitol.