Property insurance reform likely
The problems created by Hurricane Ian have prompted Governor DeSantis to call a special session of the Florida Legislature for December to provide property tax relief to victims and address our ongoing property insurance issues. CFO Patronis announced a series of measures he’d like to see the legislature tackle, including cracking down on bad public adjusters and eliminating Assignment of Benefits (AOB) contractor agreements.
On Thursday, the Governor signed an Executive Order delaying property tax payment deadlines for homes and businesses destroyed or made uninhabitable in the 26-county FEMA disaster declaration area. Lawmakers are expected to make those permanent by retroactively applying this spring’s Surfside building collapse law that created rebates when residential properties are rendered uninhabitable for 30 days or more by catastrophes. The Governor said he wants to see the legislature provide more economic relief for Southwest Florida and build on property insurance reforms passed in the May special session.
“There were some very positive reforms that were done but there were also things that we wanted to do that the Legislature at that time was not willing to do,” the Governor said during a briefing. “I think we will be able to do that in this special session.” His stated goal: “stabilize the market and introduce more competition and policies that will lower prices for consumers.”
The day before the Governor’s announcement, CFO Jimmy Patronis outlined the reforms he’d like to see the legislature pass either in December or in the March 2023 regular session. They include:
- Extending the 10-day cancellation period for a public adjuster contract and reducing their 10% fee limit for natural disaster claims;
- Banning Assignment of Benefits (AOB) contracts between homeowners and contractors;
- Establishing a statewide prosecutor to focus solely on property insurance fraud; and
- Creating a $3 million anti-fraud and public education campaign.
“Bad actors use tools like AOBs to take advantage of Florida consumers in their most vulnerable moments, preying on our citizens for too long,” the CFO said at a briefing. “At the same time, there are bad public adjusters swarming impacted areas, soliciting, and trying to make a quick buck. They are promising to help while betraying the trust of people who have lost everything.”
Since Ian struck, the insurance and reinsurance industries have been clamoring for further reforms that will ultimately protect consumers and stabilize the Florida property insurance market. Reinsurance capacity in 2023 is predicted to be tight, with much higher renewal rates, translating to higher insurance rates for consumers. Moody’s expects Florida’s litigation environment to increase the costs of hurricane claim losses. “Florida’s highly litigious environment will make it difficult for insurers to settle claims for Hurricane Ian,” Moody’s said.
LMA Newsletter of 10-24-22