Property Insurance, Condo Inspection Legislation Signed By DeSantis

TAMPA, FL — Hoping to get a handle on escalating property insurance rates, Gov. Ron DeSantis signed bipartisan legislation Thursday implementing what he calls "the most significant and comprehensive property insurance reforms Florida has seen in decades."

The bill came out of a special legislative session earlier this week intended to provide short- and long-term relief to Floridians who have been dropped by their property insurers or are facing skyrocketing rate increases, some more than double the amount they're now paying.

Additionally, the bill is intended to prevent property insurances from declaring insolvency, dropping homeowners policies and pulling out of the state due to mounting claims, the bulk of which are made following a tropical storm.

“This package represents the most significant reforms to Florida’s homeowners insurance market in a generation,” said DeSantis. “These bills will help stabilize a problematic market, help Floridians harden their homes through the My Safe Florida Home Program, and pave the way for more choices for homeowners.”

Senate Bill 2D enacts pro-consumer measures to help alleviate rising insurance costs, increases insurance claim transparency and cracks down on frivolous lawsuits, which drive up costs for all Floridians.

Specific provisions to stabilize the market include:

• $2 billion in reinsurance relief through the Reinsurance to Assist Policy (RAP) program to benefit policyholders over the next two years. It requires insurance companies to file a supplemental rate filing once enrolled in the program to provide relief to policyholders.
• $150 million for the My Safe Florida Home Program to provide grants to Florida homeowners for hurricane retrofitting, making homes safer and more resistant to hurricane damage, which can result in premium discounts for those who participate in the program.
• Prohibiting insurance companies from denying coverage solely based on the age of a roof if the roof is less than 15 years old or if the roof is determined to have at least five years of useful life remaining.
• Requiring insurance companies to provide policyholders with a reasonable explanation if they deny or partially deny a claim and provides consumers with greater access to information during the claim adjustment process.
• Creating a new standard for application of attorney fee multipliers which have been liberally applied, resulting in increased costs to consumers.
• Limiting the assignment of attorney’s fees in property insurance cases, disincentivizing frivolous claims.

Despite the bill's passage, Sen. Jeff Brandes, R-St. Petersburg, who called for the special session. wanted to know if the legislation actually reduce the high costs homeowners are now paying in Florida for insurance.

"Is it possible, even though based on this legislation if it passes, that rates will still increase going forward?" Brandes asked Sen. Jim Boyd, R-Manatee, who works in the insurance industry and sponsored the key proposals in the Senate bill.

Boyd's response was equivocal, noting that a number of rate hikes have already been approved by the Florida Office of Insurance Regulation and are set to go into effect. Residents, therefore, will experience increases regardless of the legislation.

Boyd said it would take one or two years before SB 2D reduces rates. In the meantime, he said the state could see more insurance companies pull out or go under.

"My hope is that won't be the case," Boyd said, "but I think we have to keep our eyes open and watch. It's very serious. Some carriers are on life support. Some are about to pull the plug. Others are in critical condition and without reform will go to life support and/or pull the plug. I don't know that we could be in any worse position right now as Floridians than we are."

Nearly a year after the collapse of the condominium in the Miami suburb of Surfside on June 24, killing 98 people, DeSantis also passed Senate Bill 4D requiring stricter inspections for condominiums and financial reserve requirements for condominium associations.

The bill requires inspections for all condominiums and cooperative buildings that are three stories or higher.

For buildings within 3 miles of the coast, Phase 1 inspections must occur 25 years after the building's initial occupancy and every 10 years after. For all other buildings, Phase 1 inspections must occur 30 years after the initial occupancy and every 10 years after. If a Phase 1 inspection reveals substantial structural deterioration, a more intensive Phase 2 inspection is required.

It also requires condominiums and cooperatives to conduct structural integrity reserve studies for buildings three stories or higher to ensure the funding necessary for future structural repairs is available, and prohibits a waiver of funding for certain structural reserves.

And it increases transparency by requiring all structural inspections reports and reserve studies to be part of the associations’ official record and must be provided to potential purchasers of a unit.