It's the First Day of the Session, and the Following Bills Are Pending in the Florida Legislature
So I guess we finally have an answer as to how we “fix” the insurance “problem” in Florida. The insurance industry, through some of our elected officials, has proposed some legislation that will “rein in fraud,” “inject some free market principles into insurance,” and “stop us from socializing insurance.” (All three of these quotes are actual remarks made by current Legislators). Let’s see what our industry friends have for us so far this session:
SB 1714 - Relating to Citizens Property Insurance Corporation - 2011
by Hays
-CPIC would be able to raise its rates by as much as 25 percent a year. The bill would prohibit Citizens customers from hiring a public adjuster to help them with any claims.
It would also make homeowners ineligible for Citizens coverage if they can get a policy from a private carrier that charges up to 25 percent more than Citizens does.
Related Bill: HB 1243 - Relating to Citizens Property Insurance Corporation by Boyd
SB 1462 - Relating to Powers of the Consumer Advocate - 2011
by Hays
-Does away with the ability of the Insurance Consumer Advocate to issue letter grades to insurance companies based on a number of factors (including claims handling).
Related Bill: HB 4115 - Relating to Powers of the Consumer Advocate by Plakon
SB 1330 - Relating to Residential Property Insurance - 2011
by Hays
Summary
-Deregulates insurance rates in the State of Florida. In other words, companies don’t have to get approval for their rates from the Office of Insurance Regulation. Insurance carriers would be allowed to increase customer rates by as much as 30% per year without OIR approval.
Related Bill: HB 0885 - Relating to Residential Property Insurance by Wood
SB 408 - Relating to Property And Casualty Insurance - 2011
by Richter CoSponsors: Hays CS Sponsors: Banking and Insurance
Summary
-Eliminates the requirement that insurance companies offer sinkhole coverage. Also shortens the time period by which you have to file a claim. Reduces the amount of money you will get up front when you file a claim and creates more hoops to jump through before you can get your final replacement costs.
Related Bill: HB 0803 - Relating to Property and Casualty Insurance by Wood
Usually, when the Legislature convenes for session in Tallahassee, there are a few anti-consumer bills related to insurance. The difference this session is that there are more bills that have more impact than normal. As I have repeatedly stated, the insurance market in Florida does need some changes. But these bills should be recognized for that they are – a slap in the face to insurance consumers.
Sean
This is an interesting strategy on the insurer's part. "Let's just throw it all out, and see what sticks"? What is most scary about all the proposed legislation is that most of the sponsors may not realize what impact these new laws will have on their constituents or on the constituents in another district as is the case with SB 408. They may not realize what impact the sinkhole portion of SB 408 will have on the resale value of homes and mortgage company's interest in the insurable property. Buyers will not want to buy in an area where sinkholes are prevalent and lenders will not extend credit for fear of losing value in their investment. This could be the next Housing Crisis in Florida.
Most of the new sinkhole proposals "fixes" hinges on redefining "Structural damage" (line 2725 in SB 408) "Structural damage" means:
1. A Covered building that suffers foundation movement outside an acceptable variance under the applicable building code;
2. Damage to a covered building, including the foundation, which prevents the primary structural members or primary structural systems from supporting the loads and forces they were designed to support; and
3. As may be further defined by the applicable policy. (This one is huge. It will allow the individual policies to define structural damage.)
Most of the sinkhole claims being addressed today may not meet the definition of Structural damage as stated above. And that fact is actually good. Why would a home owner want to wait until their house is condemned or structurally unsafe before attempting to fix a suspected problem? However, this is exactly what is being asked of the homeowner. Under other circumstances a homeowner's claim would denied if they let damages to home to continue and no attempt was made to mitigate the loss. We need proper legislation, which will address sinkhole claims which are submitted purely for the sake of milking the system, but we do not need legislation which will bankrupt the homeowner and devastate our housing market. This bill throws out the baby with the bath water. Gary Ahrens
HA HA HA - this is a chain email joke, right? I just have a cartoon picture in my head of legislators with lobbyists pinned to their ears telling them what to do! So New York Magazine.
This is a shame. And as a Florida Insurance Agent I get blamed for it when they pass this offensive legislation.
These bills are absurd. Are government is more corrupt than ever. These legislators are puppets and there are more of them than ever. Further, SB1714 is contradictory to current Florida legislation and case law. This is an attack. Period.
Andrew,
The laws are not absurd. They have a very real chance of passage. They are certainly a change and largely not a good change for Florida's consumers.
I urge you and anybody else with a similar view to help join us fighting these bills before they become law.