Property insurance companies are struggling. Some say a special session isn't out of the question
The legislative session has wrapped up, but some are raising concerns about a few of the bills that didn’t get passed—including a move to address property insurance in Florida.
Senate President Wilton Simpson won’t rule out a special session to deal with growing problems in the state’s property insurance market.
“There’s a possibility. We have many companies going out of business. It's certainly a crisis. I think I said a couple of weeks ago we will have failed if we didn’t pass a good property insurance bill," Simpson said.
Property insurers are struggling and homeowners are facing skyrocketing rates, or in some cases losing coverage altogether.
Monday a Leon County judge appointed the Florida Department of Financial Services as receiver for the Avatar Property and Casualty Insurance Company after the state filed a petition calling the company insolvent. That means the state will liquidate the company's assets. The order follows a similar outcome for the St. Johns Insurance Company.
The decisions will leave thousands of Floridians searching for new coverage. Officials say some of them will find policies on the private market and others will turn to the state-backed insurer of last resort, Citizens Property Insurance.
As the legislative session wrapped up last week, Simpson told reporters problems in the market could worsen
“Especially as we get into hurricane season, it will be a heightened opportunity," Simpson said. "And I think the Senate has a formation of a pretty good bill this year, we just didn’t get it finished.”
The Senate bill would have allowed 2 percent deductibles for roof-damage claims in an attempt to tamp down on fraud, which companies say is a driving factor behind rate increases. The News Service of Florida reports this week officials arrested two roofing contractors on allegations they were operating an illegal scheme related to telling homeowners they could get their roofs replaced without having to pay a deductible as long as they signed over their insurance claim rights through a process known as “assignment of benefits.”
Lawmakers in the House pushed back against the Senate plan to increase deductibles for replacing damaged roofs because of concerns about increasing out of pocket costs for homeowners.
House Speaker Chris Sprowls said he’d like to give legislation lawmakers passed last year more time to work.
“Everybody in the insurance space that you talk to always say reforms take 18 months, you know, we’re not 6 months in," Sprowls said.
That’s something it seems Simpson agrees with. He told reporters he thinks the measure lawmakers passed last year is “starting to work.”
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