Homeowners’ insurance costs needed attention

The following Editorial was published in The Daily Sun on Mar 16, 2022.

OUR POSITION: The cost of homeowners insurance and the loss of several private insurers from Florida’s marketplace is a serious problem that needed the Legislature’s attention in its 2022 session, recently concluded.

Home and property owners across Florida — including along the Gulf Coast — continue to see insurance companies cancel their coverage.

The $1.28 trillion U.S. insurance industry is leery of covering Florida properties over fear of hurricanes and tropical storms. Insurance cancellations have vexed Florida homeowners for a number of years.

One of the latest waves of cancellations and denial of claims from insurers stems from the age of roofs.

Some insurers are dropping homeowners and nixing claims if roofs are 10 years or older. The industry worries about fraudulent claims and roof replacement schemes.

Unfortunately, the Florida Legislature cannot seem to comprehensively address the problems facing both insurance companies and property owners. That includes how to deal with older roofs and damage claims as well as how the state’s Citizens Property Insurance Corp. (which offers coverage to homeowners who cannot find or afford private insurance) fits in a competitive marketplace.

Many Florida homeowners have paid insurance premiums for years — or even decades. Some have been with the same insurance agency before they moved to Florida only to be summarily dropped.

It is easy to be frustrated with the insurance industry here in Florida. Customers pay monthly and annual premiums and are supposed to get damage covered to their homes and cars when that happens.

The image for consumers is that insurance companies — some of which are wealthy enough to run multi-million dollar advertising campaigns — are happy enough to cash premium checks but hit the road when claims are filed.

Our lawmakers needed to make insurance coverage a priority. They needed to find a balance that keeps property owners who have been canceled by private insurers covered. We also need an insurance system that is not adversarial to the private sector.

But they failed that mission in the just completed legislative session.

The situation in Florida is an unfortunate failure of the marketplace. Florida attracts scores of jobs and transplants in part because of its pro-business polices and relaxed regulations. That approach is not helping with the insurance situation which saw cancellations and higher premiums start in earnest after storms in 2004.

Those big losses forced the creation of the state-run Citizens Property Insurance for property owners who couldn’t find coverage from the private sector.

Other states that deal with hurricanes have also had to deal with insurance coverage challenges.

Louisiana has a similar nonprofit, state-run insurance group. South Carolina and Texas have additional state underwriting groups to offer coverage for wind, hail and storm damage.

The state Legislature needed to make sure the insurance group remains solvent and able to cover claims while not providing a low-cost alternative that challenges other (private sector) insurers.

Unfortunately, the House and Senate, both controlled by Republicans, failed to concur on potential changes to insurance rules and deductibles related to roof repairs or address the fleeing of insurance providers from the state.

The state government can’t compel private businesses to provide certain services and products. Still, we have to acknowledge the marketplace and the Legislature is falling short in addressing the problem. Perhaps Florida needs to look at how other hurricane-plagued states are working to keep rates down and insurers on board?

It’s a challenge that shouldn’t have to wait until the next legislative session.