Republican Gov. Ron DeSantis signed a sweeping property insurance bill on Friday. How much and when it will work to stabilize the stormy market is another question.
One of the key goals of the legislation is to keep the claims process from ending up being settled in courtrooms, a problem that DeSantis said drives up legal costs for insurers.
“This bill reins in the incentive to litigate,” DeSantis said before signing the bill in Fort Myers, an area devastated by Hurricane Ian in September. “This is going to make a huge, huge difference.”
Florida has struggled to keep the insurance market healthy since 1992 when Hurricane Andrew flattened Homestead, wiped out some insurance carriers and left many remaining companies fearful to write or renew policies in Florida. Risks for carriers have also been growing as climate change increases the strength of hurricanes and the intensity of rainstorms.
The bill new law will create a $1 billion reinsurance fund, put disincentives in place to prevent frivolous lawsuits and force some customers to leave a state-created insurer of last resort, Citizens Property insurance, for a private insurer, even if the policy costs more. It will also set more stringent deadlines throughout the claims process to try to insure homeowners don’t face coverage delays.
“In terms of immediate, you will see more people be willing to write policies in Florida because of what we did,” DeSantis said.
Average annual premiums have risen to more than $4,200 in Florida, which is triple the national average. About 12% of homeowners in the state don’t have property insurance, compared to the national average of 5%, according to the Insurance Information Institute, a research organization funded by the insurance industry.
The insurance industry has seen two straight years of net underwriting losses exceeding $1 billion in Florida.