Sen. Jeff Brandes said the FL Legislature didn’t fix a homeowners insurance crisis, and a special legislative session may be needed.
The Republican-dominated Florida Legislature wrapped up the 2022 legislative session Friday having taken up issues ranging from abortion limits and immigration to gay rights and discrimination.
But politicians from both parties say the skyrocketing cost of home insurance was ignored, and needs to be fixed.
“It was a national red meat year,” said Sen. Jeff Brandes, R-St. Petersburg, referring to the Legislature addressing inflammatory issues intended to provoke the public and garner headlines.
However, lost amid the arguments over silencing the woke, women’s rights and LGBTQ agendas were those issues that directly affect Floridians’ wallets, Brandes said.
“We’re taking on national issues — Stop Woke, Don’t Say Gay, immigration,” he said. “Meanwhile, we have real problems — skyrocketing property insurance and auto insurance rates, a lack of affordable housing and our prison system is falling apart.”
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Of particular concern to Brandes is the rising cost of homeowners insurance. He’s among a growing number of legislators seeking a special legislative session this summer to specifically address the costly issue.
“The folks in the insurance industry tell me they are at a breaking point,” said House Minority Leader Evan Jenne, D-Hollywood. “So I do think a special session is likely. It is going to be brutal for people out there unless we get back here.”
“This (a property insurance reform) bill should have been worked on eight months ago. And here we are 60 days later still negotiating with the House on what the insurance industry should look like going forward,” Brandes said. “I think it’s been an absolute disaster of a year in the property insurance world. At the end of the day, the Legislature dropped the ball on property insurance this year. There’s no doubt about it. I think we’re headed toward a special session.”
It’s not the first time the insurance industry has been in crisis mode in Florida.
Between 1992 and 2018, nine hurricanes and 11 tropical storms ravaged Florida, resulting in more than $216.1 billion in damage. Unable to remain profitable under the barrage of claims, major insurance companies began pulling out of Florida, prompting the Legislature to form the nonprofit Citizens Property Insurance Corp. The nonprofit provides insurance for property owners who could no longer obtain coverage through the private marketplace.
Citizens Property Insurance was intended to be a last resort for property owners while the insurance companies and Legislature hammered out insurance reforms.
Instead, it’s become the second-largest property insurer in the state. As of Jan. 31, Citizens Property Insurance had 776,790 policies, about a 75 percent increase over the past two years.
“Two years ago, Citizens Property Insurance had about 480,000 policies. In the last year and a half, it’s risen to 800,000 policies,” Brandes said. “We expect it to be over a million policies by the end of the year.”
He said Florida continues to see a mass exodus of property insurance companies from the state due to weather-related disasters and tragedies like the collapse of the Surfside condominium tower in June, which killed 98 people.
“It’s an absolute crisis on both consumers and the insurance industry,” Brandes said. “Consumers are seeing a 30 percent increase in their insurance rates every year. That’s a huge problem. And the insurance industry as a whole lost $1.25 billion in 2020 and $1.6 billion in 2021. This is a market that’s in collapse.”
In 2020, one of the most active storm seasons on record in Florida with 31 tropical or subtropical cyclones, Florida insurance carriers said they had their worst financial year in decades, underwriting $1.57 billion in claims.
As a result, three major insurers announced they were dropping or not renewing 53,000 policies just ahead of the 2021 hurricane season.
Insurance Companies Turn Away New FL Customers
Gulf Stream Property and Casualty Insurance canceled more than 20,000 policies. Southern Fidelity canceled more than 19,600 policies and Universal Insurance Company of North America canceled 13,000 policies.