Property insurance rates are closer to being reigned in as they have been in years.
That good news came from Tasha Carter, the State of Florida’s Insurance Consumer Advocate, shared during a recent presentation at the St. Cloud Library.
“Ten companies have filed with the State for no increases, 12 have filed for reductions in rates, and two national companies that had considered leaving Florida’s property insurance market have recommitted to provide property insurance in our state,” said Carter.
The presentation was part of a town hall format, “Transforming Florida’s Homeowners Insurance Market-An Overview of Legislative Reforms.” Hosted by district 35 state Rep. Tom Keen, State Sen. Victor Torres and Rep. Paula Stark were also present.
If you own a home or commercial property, you are unpleasantly aware of zooming property insurance rates, and coverage cancellations over the past few years. The increases have been fueled by the damage from five hurricanes that have struck Florida since 2017, general inflation, and increased insurance fraud and litigation. In addition, all natural disasters nationwide affect insurance companies and thus rates. Currently, Florida ranks ninth in the country for the number of property owners without insurance.
During her presentation, Carter detailed how insurance reforms implemented by the state legislature in two special sessions and the last regular session are starting to kick in to reduce rates. She cited insurance fraud as one of the main causes of the rapid, steep increases in homeowner’s and other property insurance in the state. One of the largest forms of insurance fraud was the practice of Assignment of Benefits (AOB) used by unscrupulous contractors and attorneys.
A typical AOB example is the “free roof ” scam — a contractor entices a homeowner to sign an Assignment of Benefits agreement, a legal document that gives a contractor free reign to act against the homeowner’s insurance company legally. The contractor performs the roof work, collects the insurance deductible amount from the property owner, and then charges the insurance company an exorbitant amount for their work.
Insurance companies get faced with the dilemma of either paying the contractor or spending an often-larger amount in legal expenses to fight the contractor in court. The AOB practice, which was also being used in the disaster recovery and auto repair industries, has now been largely prohibited in Florida.
“At one time, although Florida was responsible for only 7 percent of insurance claims nationwide, 79 percent of proceeds from related lawsuits went to Florida entities,” said Carter.
Even with costs decreasing, the rise in rates, in some cases over 150%, has contributed to the housing affordability crisis.
Sen. Torres lamented the ability of the insurance industry, with vast amounts of resources and staff, to lobby the legislature while there was not much representation for individual consumers, outside of the state’s Office of the Insurance Consumer Advocate.
“We are not finished,” said Torres, referring to continued legislative insurance reform.
For more information on the Insurance Consumer Advocate, see https://bit.ly/3yOPOoe
