The Florida Senate

The Florida Senate today moved forward on several pieces of legislation designed to reduce the cost of homeowners’ insurance premiums for families across Florida. House Bill (HB) 7073, sponsored in the Senate by Senator Blaise Ingoglia (R-Spring Hill), reduces property insurance premiums by more than $500 million statewide, eliminating certain taxes and fees homeowner’s pay on their property insurance and flood insurance, and is set for final passage on Friday, March 8. Senate Bill (SB) 7028 by Senator Jim Boyd (R-Bradenton) includes $200 million for improvement grants Florida families can utilize to reduce insurance premiums by fortifying their homes, with priority for low-income families and seniors. HB 1029, sponsored in the Senate by Senator Nick DiCeglie (R-Indian Rocks Beach), creates a pilot program for condominium associations to apply for mitigation grants.

Senate President Kathleen Passidomo (R-Naples) offered the following statement:

“The cost of property insurance is posing a major affordability problem for Florida homeowners. Every homeowner needs property insurance that is reliable and affordable. As I know from firsthand experience with Hurricane Ian, when disaster strikes, it is important to be able to successfully navigate the claim process and be compensated for losses in a timely manner.

“A healthy insurance market results in a wide array of consumer choices, competition that drives down prices and improves coverage options from insurers that are financially strong and able to promptly pay the full value of claims. In recent years, due primarily to excessive litigation, Florida’s insurance market has struggled. Many property insurers went insolvent, left the state, or reduced their willingness to write new policies. Florida’s Legislature and Governor took aggressive action to solve this problem, passing major property insurance legislation in 2021 and 2022, followed by major legal reforms and consumer protections last year.

“We know these reforms are working. We are seeing new insurers and new private capital enter Florida, while large companies recommit to our state, citing the litigation reforms enacted last year. As companies see Florida is a place where they can fairly compete for business, without an undue risk of frivolous litigation, other large, national insurers as well as newer companies will want to do business in our state.

“Unfortunately, the positive momentum we are seeing across the market as a whole is not yet reaching kitchen tables around the state. Families are frustrated by rising premiums, and need to see savings now.

“Every little bit helps. Cutting $500 million in taxes associated with flood insurance and property insurance premiums is important for families trying to make ends meet as our insurance market strengthens.

“High-priced items like a new roof or storm windows can make homes safer, while reducing insurance premiums, yet these resiliency enhancements can be financially out of reach for many. The My Safe Florida Home Program supports families across the state who are seeking to fortify their homes against natural disasters, while at the same time reducing property insurance premiums. We are increasing funding for this great program, prioritizing lower-income Floridians and seniors, and beginning the process of expanding coverage to condominium associations, which will help many of our coastal residents.

“I want to make sure Floridians know that as our insurance market stabilizes, Florida’s Legislature and Governor utilized the 2024 Legislative Session to continue efforts to fortify homes and rein in costs for Florida families.”

$500 MILLION IN PROPERTY INSURANCE TAX RELIEF FOR HOMEOWNERS

• HB 7073 includes a one-year relief for residential property insurance policyholders, covering the cost of insurance premium tax and the State Fire Marshal assessment for residential property insurance policies written between October 1, 2024, and September 30, 2025, for a twelve-month coverage period.
• The bill also includes a one-year insurance premium tax relief on flood insurance policies, reducing the cost of flood insurance policies written between October 1, 2024, and September 30, 2025.

FORTIFYING HOMES AGAINST STORM DAMAGE

Increased Resiliency Efforts to Help Lessen Insurance Costs

In May 2022, during Special Session 2022-D (SB 2-D), the Legislature reestablished the My Safe Florida Home Program to provide financial incentives for property owners to obtain free home inspections which identify mitigation measures and provide grants, reducing vulnerability to hurricane damage and helping decrease the cost of property insurance. The Legislature appropriated $150 million for the program. During the 2023 Legislative Session, an additional $100 million was appropriated. During Special Session 2023-C, HB 1-C appropriated $176 million for the backlog of 17,617 grant applications that had been awaiting funding.

This year, SB 7028, by Senator Boyd, increases eligible improvements and implements policies for prioritization. Specifically, this bill prioritizes low-income seniors, helping Florida’s senior citizens remain in their homes and live out their golden years in safety and financial security. The bill appropriates $200 million for additional grants.

HB 1029, by Senator DiCeglie, creates the My Safe Florida Condominium Pilot Program to provide mitigation inspections and grants to eligible condominium associations. The General Appropriations Act appropriates $25 million for the pilot program. 

Additional Steps to Stabilize and Strengthen Florida’s Property Insurance Market

Increasing Consumer Protection

In 2023, SB 7052, by Senator Travis Hutson (R-St. Augustine), Dean of the Senate, increased consumer protection and insurer accountability.

• Prohibition on Cancelling Unrepaired Property – Prohibits insurers from cancelling a property insurance policy during any pending claim.
• Coverage of Policies with Insolvent Insurers – Protects policyholders whose property insurance company becomes insolvent by requiring Citizens to cover the property.
• Mitigation Discount Updates – Requires property insurance mitigation discounts be updated at least every five years and requires insurers to provide consumer-friendly information on their website describing hurricane mitigation discounts available.
• Claim Handling – Requires liability insurers to follow proper claims handling practices on and provides that insurers engaging in a pattern or practice of violations are subject to enhanced enforcement penalties.
• Claim Handling Manuals – Requires insurers to create and use claim-handling manuals that comply with the Insurance Code and, at a minimum, comport to industry standards.
• Notice of Change in Adjuster Report – Prohibits alteration or amendment of an adjuster’s report without providing a detailed explanation as to why any change was made if such change has the effect of reducing the estimate of the loss. The insurer must also either create a list of changes and who made the change or retain all versions of the report.
• Prohibition on Bonuses to Executives of Insolvent Insurers – Prohibits officers and directors of impaired or insolvent insurers from receiving a bonus.
• Increase in Office of Insurance Regulation Fine Authority – Increases administrative fines that may be levied by the OIR on insurers by 250 percent generally, and 500 percent for violations stemming from a state of emergency such as a hurricane.
• Mandatory Market Conduct Exams – OIR must initiate a market conduct examination after a hurricane if, at any time more than 90 days after the end of the hurricane, the insurer is among the top 20 percent of insurers in consumer complaints or claim denials.
• Regulation of Hazardous Insurers – Specifies factors the OIR may consider in determining whether the continued operation of an insurer may be deemed hazardous to its policyholders, creditors, or the general public.
• Prompt Insurer Responses to Consumer Complaint Inquiries – Requires insurers to promptly respond to the DFS Division of Consumer Services and increases fines for noncompliance.
• Prior Approval of Insurance Forms – Requires insurers that violate the Insurance Code to obtain prior approval of forms from the OIR for three years after the violation.
• Insurer Notification of Suspending Writing Policies – Requires property insurers to report to the OIR any temporary suspension of writing new policies.

Comprehensive Legal Reforms Reduce Costs of Frivolous Litigation

The Legislature has taken action to reduce incentives and avenues for unnecessary litigation. In 2021, Florida had 6.9 % of the homeowners’ insurance claims filed nationally, but 76 % percent of lawsuits, which was dramatically driving up premiums, and pushing insurers out of the state.

HB 837 (2023), by Senator Hutson, reformed Florida’s tort laws to decrease frivolous lawsuits, while protecting the rights of Floridians who suffer a loss.  For too, long Florida families shouldered the hidden cost of lawsuit abuse as litigation drives up the basic costs of goods and services for everyone across all areas of industry and commerce. This legislation furthered those efforts striking the right balance and protecting the rights of Floridians who suffer a loss, while at the same time safeguarding everyone else against the hidden costs of prolonged litigation.

Contingency Fee Multipliers – Provides a contingency fee multiplier for an attorney fee award is appropriate only in a rare and exceptional circumstance, a federal standard.
Negligence is not Bad Faith – Clarifies negligence alone is not enough to demonstrate bad faith.

• Good Faith by Insureds – Allows the trier of fact in a bad faith action to consider whether the insureds, claimants, and their representatives acted in good faith when furnishing information, making demands, setting deadlines, and attempting to settle the insurance claim; if they did not, damages from a successful bad faith action may be reduced.
• Offer of Judgment – Applies the offer of judgment statute to any civil action involving an insurance contract. Requires a party that did not accept a settlement offer when it should have to pay the other side’s attorney fees from the date of the offer.

Strengthening Florida’s Property Insurance Market

SB 2A (2022), by Senator Boyd, requires insurers to more promptly communicate, investigate and pay valid claims. Anticipated shortages in the reinsurance market were addressed through a new optional state reinsurance program. Excessive litigation was addressed by eliminating one-way attorney fees for property insurance and instead allowing both parties the opportunity to obtain fees through the offer of judgment process. The bill also strengthened the regulatory authority of the OIR over property insurers.

Stabilizing Florida’s Property Insurance Market

SB 2D (2022), by Senator Boyd, stabilized Florida’s property insurance market with pro-consumer measures that improve choice and increase transparency between homeowners and insurance companies to reduce rates over time. The legislation included significant anti-fraud and legal reforms.

One of the most important parts of this legislation was is the update to roofing policies, which ensures there is a clear understanding between homeowners and insurance companies about roof repair and replacement coverage and costs. The bill protects homeowners from being canceled when a roof is less than 15 years old, or when an inspection shows an older roof still has plenty of useable life left, and updates the building code to protect against unnecessary and costly roof replacements that, when part of an insurance claim, impact everyone’s premiums.

Increasing Insurer Transparency

SB 2D (2022) requires insurers to notify policyholders that they can request a copy of any detailed estimate of the amount of the loss determined by the adjuster. The insurer must send the detailed estimate to the policyholder within seven days. Further, the bill requires insurers to provide a reasonable explanation in writing of the basis for the payment, denial, or partial denial of a claim. If the claim payment is less than specified in any insurer’s detailed estimate of the amount of the loss, the insurer must provide a reasonable explanation of the difference.

The bill also directs OIR to make publicly available data detailing the number of policies, amount of premium, number of cancellations, and other data for each property insurer and specifies that this information is not a trade secret.