Florida Home Insurance Policy Changes Starting July 1st

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Governor DeSantis will sign Senate Bill 76, into law. The law which takes effect July 1st puts several reforms into place aimed at providing greater stability to Florida’s challenging property insurance market. Aside from rapid increases in rates, recently three key property insurance companies announced they shed a combined 50,000 policies. Actions that haven’t occurred in Florida’s property insurance market since the great recession over a decade ago. 

The problems are numerous. Florida is the highest risk state to insure. Risk due to an increase in storms is rising. Florida far and away leads the country in property insurance fraud and litigation. The new law is aimed at cracking down on questionable practices by lawyers and contractors that drive up the price of all home insurance policies in Florida.

As of July 1st, it’s illegal for contractors to advertise or solicit homeowners for the purpose of filing an insurance claim. Also, roofing contractors will be mandated to provide a detailed cost analysis for all insurance claims, and insurance adjusters won’t be able to offer homeowners incentives for inspections. Furthermore, one-way attorney fees are eliminated, and attorneys will only be compensated based on the cost and recovery above what had been offered by an insurance company prior to litigation. It reduces the period for initial insurance claims to be filed from three to two years and lastly citizens insurance has annual increases capped at 15%.

It’s straightforward. Reduce the opportunity and incentive for contractors and attorneys to pursue potentially unnecessary claims and lawsuits. Provide some type of cost certainty for homeowners with the state’s insurer of last resort. This is a priority because Florida’s percentage of property insurance policies nationally is at 8% and property insurance lawsuits nationally are at 76%.

Those were the findings of Florida’s Office of Insurance Regulation based on the National Association of Insurance Commissioners Annual report. As you might imagine all of that adds up to you paying a lot more for property insurance. At the time of its passage, over 130,000 annual cases of insurance fraud were identified by regulators adding an average of about $350 in costs to Florida property insurance bills annually. Reform was needed and this legislation won’t fix everything, but it certainly will help. 

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