TALLAHASSEE, Fla. (AP) — Florida Gov. Ron DeSantis on Thursday signed into a law sweeping property insurance legislation that creates a $2 billion reinsurance fund and rewrites rules on coverage denials and attorney fees, in a move to stabilize rising costs and insurer losses.
DeSantis, a Republican, announced the bill signings in a statement that called the package “the most significant reforms to Florida’s homeowners insurance market in a generation."
The signings mark an end to a special legislative session on insurance where lawmakers in the GOP-controlled statehouse approved the broad measures in three days, with little public input or expert analysis. The Legislature failed to approve insurance reforms earlier this year during their regular meeting period, which was dominated by intense partisan fights over bills on abortion, sexual orientation and gender identity.
In the statehouse, the bills largely moved with bipartisan support, with lawmakers describing the package as a meaningful first step in repairing a market plagued by insurer insolvencies, policy cancelations and rising insurance costs.
The main point of criticism from Democrats, the minority party, was that the legislation does not do enough to grant immediate financial relief to homeowners whose premiums have increased. Republicans acknowledged it would take 12 to 18 months before prices may drop.
“I don't know what else I can do to lower my insurance,” said Roni Sterin, a real estate agent in Broward County who said her insurance costs unexpectedly jumped about $1,500 recently. “Nobody's helping us.”
The insurance industry has had two years of underwriting losses exceeding $1 billion each year and several insurance companies have gone insolvent, required midterm cancellations, are in liquidation or have stopped writing new business since 2021, the governor said in his proclamation calling lawmakers back to the Capitol. The loss of private insurers has driven property owners to Citizens Property Insurance, a state-run public insurer meant to be a last resort.
The new laws would create the $2 billion Reinsurance to Assist Policyholders program for insurers to purchase insurance to help insulate themselves from risk. Insurers would have to reduce policyholders' rates to access the state reinsurance fund. It also offers grants of up to $10,000 to outfit homes so they are less vulnerable to hurricane damage, if the homes meet certain criteria.
The legislation forbids 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. 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.
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 package also includes a measure to require that all condominiums higher than three stories statewide have periodic inspections of their structural integrity, a proposal that came in response to the Surfside condominium collapse that killed 98 people nearly a year ago.
The bills would allow for more state oversight so regulators can spot trends, analyze reasons and try to prevent the future failure of insurers.