Action, not words, needed on insurance reform

The following editorial appeared in The Daily Sun on May 22, 2022.

OUR POSITION: Legislators are headed back to Tallahassee Monday for a second special session that will explore ways to deal with soaring home insurance policy costs and the flight of insurance companies from Florida. We are expecting positive answers to the dilemma.

Gov. Ron DeSantis has signaled his confidence lawmakers can fix the property insurance crisis when they begin a second special session Monday in Tallahassee. The governor, in public appearances this past week, said he expects significant progress and legislation to come out of the Legislature.

We hope he’s right because time is running out. More and more homeowners are about to be kicked to the curb as three major insurers sought relief last week from state regulators. And the solution to their problems only promises to put a greater burden on homeowners who are already dealing with inflation that continues to syphon funds from their household budgets.

Three major insurance companies made a pitch to the Office of Insurance Regulation Tuesday. They want to cancel policies and raise the rates on the ones they keep.

Florida Farm Bureau, seeks a 48.7% jump in rates for homeowners’ policies. First Floridian Auto and Home is asking for a 23% increase. KIN Interinsurance Network wants a 25.1% rate hike.

All three companies are blaming excessive claims and especially what they called questionable roof replacement costs.

That Tuesday meeting comes on the heels of regulators approving FedNat Insurance Co., Maison Insurance Co. and Monarch National canceling 68,200 policies. Homeowners covered by those policies have 45 days to find a new insurance company.

At least those companies are still around. Lighthouse Property Insurance Corp., Avatar Property & Casualty Insurance and St. Johns Insurance Co. all declared themselves insolvent and went into receivership in the past two months.

All this puts a greater burden on the state’s insurer of last resort Citizens Property Insurance Corp., which saw its policies grow to more than 851,000 as of April. It’s a big jump from the 589,000 or so it had a year ago.

That is a scary scenario if a major hurricane hits the state this year. If Citizens cannot cover all the claims, that leaves the state drowning in costs to make good on the policies and it all could come down to depleting our reserve funds and/or going back on taxpayers to make up the difference.

The picture is surely in clear focus for lawmakers who meet starting Monday.

The problem is, these are the same legislators who said they didn’t have time to deal with this speeding train wreck during the regular session earlier this year. We have never figured out why that was the case when property insurance has been a huge issue for a long time.

House leadership claimed more patience was needed for 2021 reforms to take hold and that there just was not enough time in the regular session to come up with solutions. Not much has changed in a month, except that DeSantis wants something done. And, that alone, will spur legislators to do more than go through the motions.

Solutions will surely include some sort of relief or oversight on the number of roof claims insurance companies have been howling about for more than two years now. Other ideas could involve seeking more sources of re-insurance for Florida companies. That is the insurance they take out to cover claims in a major catastrophe.

While some homeowners await a letter revealing if they are among the thousands of policies being dropped, we call on lawmakers to come up with real solutions and turn a deaf ear to lobbyists who may try to divert them from the task at hand.

Time is running out.