Thousands Of FL Homeowners Who Have Never Filed A Claim Have Been Dropped By Insurers

FLORIDA — With homeowners being pushed to pay thousands more for insurance, Florida Gov. Ron DeSantis agreed on Monday to convene a special legislative session in May to give the legislature a chance to hammer out a solution.

During a news conference in Jacksonville, DeSantis agreed 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 to mounting claims.

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. Others are appealing to the Florida Office of Insurance Regulation to allow them to raise rates, including Southern Fidelity Insurance Co., which requested approval for a 195 percent rate hike in January.

The call for a special session to fix the property insurance crisis comes from both sides of the legislative aisle.

"Florida is nearing a tipping point, and our neighborhoods are in danger of losing their viability," said Senate Minority Leader Lauren Book, D-Plantation. "Some insurance companies have been unable to reissue policies, are ceasing operations or are pricing renewals at unaffordable rates, leaving thousands of Floridians with the unsettling surprise that they’ve lost coverage, and must scramble to protect their most valuable asset. All of these issues are clearly creating an affordability crisis for our constituents."

Last week, Sen. Gary Farmer, D-Fort Lauderdale, echoed Book's concerns but emphasized that the special session should focus on relief for homeowners rather than incentives to keep insurers from pulling out of Florida.

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“It is clear that, as the Legislature continues upon its current course of inaction, more and more Floridians are being priced out of the security and peace of mind that should be obtainable through a properly regulated insurance industry. While it is important to note that this call to action is bipartisan, it should also be understood that the solutions considered in a special session should be focused on measures that will directly benefit consumers in our state, many of whom face regular premium increases without ever having filed a claim," he said.

"This special session should not be used as an excuse to simply set up more avenues for major insurance companies to continue to line their pockets," Farmer said. "It has been clear for some time now that the major cost drivers in Florida’s homeowners’ insurance market have been rooted in corporate greed, as insurers wrongly deny or limit claims on a repeated basis and then pass the penalties for doing so onto the ratepayers in order to protect their own bottom lines."

"Florida’s private property insurance market has collapsed, and it is evident we must call a special session to address this dire situation," said Sen. Jeff Brandes, R-St. Petersburg. "In the past 30 days, thousands of Floridians have had their homeowners' insurance company exit Florida. Over 800,000 homeowners cannot find insurance aside from (the state-founded) 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.

Brandes said Citizens Property Insurance Corp. was intended to be an option of last resort. Instead, it's become the second-largest insurance in the state, writing 776,790 polices as of Jan. 31.

"The session should address Citizens Property Insurance reform, as Citizens estimated policy count is growing by 6,000 policies a week and will soon top 1 million," he said.

He chided his fellow legislators for failing to take on this issue during the regular session.

"With the 2022 hurricane season quickly approaching and an unstable market, the Legislature chose to leave homeowners exposed to a perfect storm of rising rates, limited coverage and diminishing options," Brandes said.

He noted that Florida's eighth-largest property insurance company, St. Johns Insurance, filed for bankruptcy in March, closely followed by Avatar Property and Casualty insurance Co.

Meanwhile, Progressive Insurance is dropping more than 56,000 policyholders this year and the 50-year-old Florida Farm Bureau is among a dozen insurance companies that said it will not renew thousands of policies.

He said the crisis can only be resolved with "bold legislative action."

"Without action, we will see a mass exodus of carriers, which will have devastating consequences for the people we serve in Tallahassee," he said.

Facing pressure from both chambers, DeSantis agreed to call a special session, while adding that reforms should be a "deliberative and evidence-based process, which will include fact-finding procedures in which insurance executives are questioned under oath, and will ultimately lead to the consumer protections that everyday Floridians so desperately need.”