Regulators, insurance coverage firms and attorneys on the Florida Chamber of Commerce Annual Insurance coverage Summit this week despatched a transparent message to lawmakers about tinkering with Florida’s property insurance coverage regulation, two years after main legislative reforms have been adopted:
“Don’t contact it. The 2022 and 2023 reforms are working. Allow them to proceed.”
Whereas many policyholders statewide have continued to see premium will increase this 12 months, placing strain on lawmakers to take new motion, others have seen slight decreases or charge stabilization, panelists mentioned. And all indicators level to a steadily bettering market in a state that was in a full-blown disaster simply 18 months in the past: An actual decline within the large variety of claims lawsuits; bettering loss ratios for many carriers; a manageable hurricane season this 12 months; billions of {dollars} in new capital within the state; and, sure, even a discount in reinsurance costs in 2025.
“I feel the Florida Workplace of Insurance coverage Regulation would like to see the established order for now,” mentioned Virginia Christy, deputy commissioner for property and casualty at OIR.
Plenty of Florida and nationwide information studies in latest weeks have contended that some Florida insurers, together with Residents Property Insurance coverage Corp., are failing to pay claims from latest storms. These articles haven’t offered context, together with the truth that many claims have been under deductible ranges or have been the results of non-covered flooding, officers have mentioned. Nonetheless, these studies will undoubtedly put strain on lawmakers to take measures to guard policyholders or to penalize insurers – one thing legislators ought to resist, panel members on the summit mentioned.
“The reforms are working properly. To have a knee-jerk response in one other route wouldn’t be useful,” mentioned state Rep. Tom Fabricio, R-Miami Lakes.
That being mentioned, others on the two-day convention in Orlando famous that some insurance-affecting laws will likely be thought-about on the 2025 common legislative session that begins in March:
House elevation. State Sen. Blaise Ingoglia, the incoming chair of the Senate Banking and Insurance coverage Committee, echoed others who mentioned that extra residence strengthening measures are key to lowering insurance coverage losses within the state. He plans to introduce laws that might enable native governments to freeze property taxes charges for 15 to twenty years if owners elevate their properties above potential flood ranges.
“We have to create incentives for individuals to construct up and out of hurt’s manner – climate or not they’ve had harm to their properties presently,” mentioned Ingoglia, R-Spring Hill, who occurs to be a house builder by commerce and whose district noticed a whole lot of properties flooded within the latest Hurricanes Helene and Milton.
Florida legislators final 12 months renewed funding for the My Protected Florida House program, which gives matching grants for wind mitigation. However this system proved so fashionable that it shortly ran out of accessible funding. New funding plans are more likely to be within the hopper within the subsequent legislative session. And the Nationwide Flood Insurance coverage Program gives some group reductions when properties are rebuilt at elevation.
The property tax concept is new and could be one other nudge in the proper route, Ingoglia mentioned.
Litigation funding. Efforts to require extra disclosure of third-party lawsuit buyers did not cross within the 2024 legislative session. However the concept will likely be again once more in 2025.
“We’ll begin the place we ended final 12 months and get this factor by means of the Senate,” mentioned state Sen. Jay Collins, R-Tampa. “It may very well be an uphill battle within the Home, although.”
Litigation funding by funding companies has been a difficulty in a number of states in recent times. Advocates say it permits plaintiffs to hunt justice when attorneys could not wish to danger the expense. However critics say the follow promotes frivolous fits and sophistication actions that shouldn’t be pursued within the first place.
“Do we actually need lawsuits to be based mostly on whether or not they’re a part of a great funding portfolio?” requested Alan Mirelman, a protection legal professional with Beytin McLaughlin regulation agency in Orlando.
The Nationwide Council of Insurance coverage Legislators final month revealed mannequin laws designed to carry transparency to and limits on referral charges to litigation funding, seen here.
PIP regulation. Florida’s private harm safety, or no-fault auto insurance coverage regulation, has seemingly been on the legislative agenda yearly for nearly 20 years. Lawmakers authorized some important modifications in 2021, however Gov. Ron DeSantis vetoed the invoice. And when the same measure is launched once more within the coming session, it would meet with opposition from some giant insurance coverage firms in Florida.
Knowledge from regulators present that switching from a no-fault system to 1 that requires motorists to pay for bodily harm may initially cut back auto premiums for many drivers. However in only a few years, with greater limits on bodily harm protection, charges would probably climb by greater than 48%, mentioned Roosevelt Mosley, managing principal at Pinnacle Actuarial Assets.
Legal professional involvement and lawsuits additionally would in all probability improve, after declining within the final three years, mentioned Michael Carlson, president of the Private Insurance coverage Federation of Florida, which represents a number of the bigger insurers.
Medical malpractice. Regardless of some limits on punitive damages in Florida, 4 Florida cities proceed to steer the nation – far outpacing similar-sized U.S. cities – in medical malpractice insurance coverage charges. And that threatens to harm well being care progress in Florida, panelists mentioned.
Payments that would offer additional limits on malpractice damages are more likely to be launched within the 2025 session.
Different takeaways from the summit:
Reinsurance charges for property insurers, globally, will drop by 5% to 10% for 2025 renewals, mentioned Chris Spencer, government director of the State Board of Administration. The board oversees the Florida Hurricane Disaster Fund in addition to investments by the Florida Retirement System, so Spencer tracks reinsurance investments and prices.
He famous that Florida reforms are a giant cause for reinsurance firms’ newfound confidence in property insurers. “All in all, the outlook for the market now could be very optimistic,” Spencer mentioned.
Ought to Florida encourage an finish to asphalt roof shingles? Florida Insurance coverage Commissioner Michael Yaworsky thinks so, noting that 1000’s of claims are the results of wind harm to shingles.
“Shingles are purported to final 30 years. However they don’t. Not in Florida,” Yaworsky mentioned. “It’s time to put in writing asphalt shingles out of the plot in Florida.”
Different however usually costlier roof choices embody clay and polymer tiles, steel roofing, concrete shingles, and different methods. Yaworsky promised extra details about an OIR effort on that entrance later this 12 months.
Claims litigation, usually thought-about the bane of Florida insurers’ existence from 2017 till just lately, has declined considerably for the reason that 2022 reforms that ended one-way legal professional charges and assignments of advantages.
Service of course of filings, required when lawsuits are filed, numbered just under 250,600 by Oct. 31 of this 12 months. That’s about 42% under the amount recorded for a similar interval in 2021, on the peak of the litigation flood, mentioned Michael Dobson, common counsel on the Florida Division of Monetary Providers.
“That’s significantly exceptional when you think about the variety of storms we’ve had in Florida this 12 months,” Dobson mentioned.
Public adjusters, usually criticized by insurance coverage pursuits for inflating harm claims, have dwindled after AOB limits have been enacted in recent times. Claims involving public adjusters have dropped from as excessive as 20% after Hurricane Ian to about 5% right this moment, one panelist famous.
Windshield restore fits even have dropped like a rock. Florida lawmakers in 2023 authorized laws that banned assignment-of-benefit agreements in auto-glass restore claims, and barred glass retailers from providing presents to insureds. Because the regulation took impact, auto-glass fits have dropped, from about 60,000 in 2023 to about 10,000 to date this 12 months, and a few plaintiffs’ attorneys who specialised in which have dropped that space of follow, mentioned Ashley Kalifeh, a lobbyist and guide with Capital Metropolis Consulting.
Florida insurers want a greater soapbox. Carriers must do a greater job of selling storm mitigation measures, mentioned Tony Cotto of underwriting coverage for the Nationwide Affiliation of Mutual Insurance coverage Firms.
Insurance coverage firms, lengthy a simple goal for policyholders going through greater premiums, also needs to be united of their messaging to shoppers, particularly after plaintiff attorneys complained that the 2022 and 2023 reforms have been a “giveaway” to insurers.
“The trial bar has been very united in its messaging. That you must be united, too,” mentioned Spencer, of the State Board of Administration. “That you must inform individuals how you’re defending their nest egg, defending their internet value. Inform the story of success on this state.”
Insureds additionally could not understand that a part of the rationale for greater charges lies with inflation and pandemic-fueled materials shortages.
“Restore prices have doubled,” defined Don Matz, CEO of Orange Insurance coverage Change. “Roof shingles price extra; drywall prices extra,” he famous. Lumber costs have dropped just lately, however solely from a excessive seen in 2021.
