Skyrocketing Property Insurance Claims Prompt Governor To Call Special Session

FLORIDA — Despite a lukewarm reception to the idea by Florida's Republican legislators, Gov. Ron DeSantis issued a proclamation this week calling on the Legislature to hold a special session to address escalating property insurance rates and the cancellation of thousands of homeowners' insurance policies.

DeSantis' communications director, Taryn Fenske, said the governor wants the Legislature to look at possible changes to the Florida Building Code that would make property insurance more affordable and with civil remedies for property owners who've had their policies dropped, have seen their rates double or have received notices that their policies won't be renewed.

The special session will get underway at 9 a.m. Monday, May 23, and run through Friday, May 27.

During a news conference earlier this month, DeSantis agreed that something must be done to stabilize property insurance premiums for homeowners while ensuring that insurance companies don't pull out of the state or drop policyholders due a rising number of claims and "Florida’s general tort environment related to property insurance that has led to thousands of frivolous lawsuits," he said.

According to the Florida Office of Insurance Regulation, Florida accounted for 79 percent of the nation’s homeowners insurance lawsuits over claims filed, while making up only 9 percent of the nation’s homeowners insurance claims.

In 2020, one of the most active storm seasons on record in Florida with 31 tropical or subtropical cyclones, Florida insurance carriers reported their worst financial year in decades with $1.57 billion in claims.

Following another active hurricane season in 2021, the insurance industry reported net underwriting losses of more than $1 billion.

As a result, three major insurers announced they were dropping or not renewing 53,000 policies ahead of the 2022 hurricane season.

In 2021, four insurance companies either became insolvent or required midterm cancellations. And, in the last three months, three more insurance companies writing homeowners' policies in Florida have either gone insolvent or announced bankruptcies.

Many others have appealed to the Office of Insurance Regulation to approve rate hikes, quit writing new policies in Florida or have notified homeowners that their policies won't be renewed, "leaving tens of thousands of policyholders seeking coverage with limited options in the marketplace," DeSantis said.

Among those limited options is the state-run Citizens Property Insurance Corp.

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. for property owners who could no longer obtain coverage through the private marketplace.

Intended to be an "insurer of last resort," Citizens Property Insurance has seen an increase of 399,822 policies since the beginning of 2020, and is on track to have more than a million policies by the end of this year," DeSantis said.

Among those calling on DeSantis to convene the special session was Florida Sen. Jeff Brandes, R-St. Petersburg, who said residents have seen their insurance rates triple in the past two years.

“Floridians are suffering from skyrocketing rate increases, and you have the authority and duty to demand House and Senate engagement,” Brandes wrote to DeSantis. “This issue is too important for any further delay, and if legislative and executive branch leadership fail to act, then I will do everything in my power to protect my neighbors from the crippling impacts of rising insurance costs.”

See related stories:

• Insurance Rate Hikes Of 195 Percent Requested For Homeowners
• Homeowners Insurance Crisis Could Lead To FL Special Session
• FL Property Insurance Reform Focus Of Special Session OKed By DeSantis

Nevertheless, a Florida Department of State poll done earlier this month showed that a majority of GOP legislators didn't share Brandes' concerns.

Of the 17 out of 40 senators who responded to the poll, 16 senators were in favor of a special session with the majority Democrats. Only three Republicans were in favor: Brandes, Sen. Aaron Bean of Nassau and Duval counties and Sen. Ed Hooper of Pasco and Pinellas counties.

In the House poll, 52 of the 120 members responded, with 48 Democrats favoring a special session.

Among those not in favor of a special session was Florida Speaker of the House Chris Sprowls, R-Palm Harbor, who said there hadn't been enough time to see how Senate Bill 76, passed in 2021, would impact insurance rates. The bill limited frivolous lawsuits by changing how attorneys' fees are awarded in property insurance litigation and set a two-year deadline for filing claims.

“The Legislature made great strides on meaningful property insurance reforms in 2021, and we are already seeing the positive impacts of that work,” Sprowls said in a statement this week.