One of the 162 news laws which took effect yesterday was Florida’s property insurance reform. With Elsa reminding us we’re firmly in hurricane season and property insurance already being a mess in Florida heading into this year’s season, here’s a reminder of the changes which are now law in Florida.
First, it’s illegal for contractors to advertise or solicit homeowners for the purpose of filing an insurance claim. Roofing contractors are mandated to provide a detailed cost analysis for all insurance claims. also, insurance adjusters won’t be able to offer homeowners incentives for inspections and 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. Furthermore, 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%.
Aside from rapid increases in rates, recently three key property insurance companies announced they’d shed a combined 50,000 policies. Based on new insurance industry information we’re at risk of much more. With Florida having just 8% of the country’s property insurance policies but accounting for a whopping 76% of the lawsuits, combined with being the most at-risk state to begin with.
Word is many insurers are prepping to dump more policies and specifically homeowners with roofs that are over ten years old. According to reinsurance rates, Florida’s property insurance cost to originate for carriers rose 54% in just the last year and the cost for Florida’s property insurance policies for carriers is now 36% more expensive for the same types of policies originated in other states. It’s not complicated. Insurance carriers won’t write policies to lose money and even 10% plus increases approved by Florida’s Office of Insurance Regulation won’t do the trick. Let’s hope the new law works.