Proposed bill aims to rein in property insurance costs, curb abuse

Homeowners’ insurance prices are climbing, with one report saying Florida’s property and casualty industry is “spiraling toward collapse.”

Now, Florida lawmakers are trying to make changes to rein in costs and prices.

Sticker Shock

Marlene Parker is losing her homeowner’s insurance again. But she did not panic. It has happened once before, and Parker simply chose a different carrier.

“It was actually cheaper and more coverage. and you know, so it was no problem,” Parker said.

But this time around, the call to her broker went differently.

“The best price is more than double what I was paying. So then I freaked out,” Parker said.

The best price is $2,900, more than double the $1,300 she currently pays.

“In your specific case, only a couple carriers are willing to offer quotes due to your roof being 19 years old. Unfortunately, this is the best rate,” Parker read.

But she doesn’t want to replace her roof yet.

“It shouldn’t have to be done until there’s actual damage. It’s working. If it’s not broke don’t fix it.”

And the money to replace it right now isn’t exactly there. Parker cares full-time for her husband with cancer and they live off his disability.

“Times are tough. Plus stress. A lot of gray hairs. I’ve earned every one.

But talk to insurance industry experts and they say the same about the state of property insurance.

“Spiraling Toward Collapse”

A report authored by Guy Fraker says the industry is in trouble not because of hurricanes, but something else.

“Litigation has replaced hurricanes as the greatest systemic threat to Florida’s P&C market,” Fraker said.

Fees paid to attorneys by Florida carriers exceed what people receiving for their damages.

And that cost is passed along to the consumer, something Sen. Kathleen Passidomo said isn’t fair. That is why she supports Bill SB 76, legislation aiming to help control insurance prices over time.

“Insurance companies have to be much more responsive to their policyholders. But the trial lawyers have got to stop filing lawsuits that are that are bogus. And we’ve got to stop contractors from going out and basically trying to coerce people into to filing claims,” Passidomo said.

Claims that can create a domino effect in a community.

“If you see everyone in your neighborhood getting a free roof, and you don’t get a free roof, I would suspect the thought would be ‘I must be an idiot because I didn’t get a free roof and everybody else did’,” Passidomo said.

The bill aims to change four things including reducing the time people have to file a claim from three years to two years and give claimants actual cash value instead of the replacement cost if the roof is older than ten years. As for lawsuits, the proposed legislation says insurers must be given time to inspect the property before anything is filed and that the suit outcome should dictate the attorney’s fees paid.

The cost of reinsurance, or the insurance companies’ insurance, is also driving up costs. If the cost of doing business in Florida continues to go up, fewer companies will write new policies here — which is something we are already seeing.

As for Parker, she said she can’t rationalize paying all that money for coverage and is working on a way to pay for a new roof.

Click to access FLORIDA-Complete-Report-Complete-Report-1_20.pdf

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