Florida Lawmakers To Consider Ambitious Property Insurance Rewrite

January 23, 2011

An ambitious Florida property insurance rewrite has been filed and will get its first public hearing this week as lawmakers try again to reduce costs for the industry.

From making it harder for public adjusters to re-open old claims to holdbacks of payouts pending proof of repairs, the bill (SB 408), sponsored by Sen. Garrett Richter, R-Naples, bears many similarities to legislation vetoed by Gov. Charlie Crist last year , who during his independent campaign for the U.S. Senate argued that part of it would raise rates in difficult economic times.

Richter, chairman of the Senate Banking and Insurance Committee, said the bill is a template for a final product that may not emerge until well into the session. The bill is expected to get its first hearing on Tuesday before Richter’s committee.

“I’m sure we’re going to see many changes between the bill that’s filed and the bill that we finally come up with,” Richter said earlier this month. “This bill is a starting point in that discussion.”

Among the provisions are:

  • Allowing insurance companies to hold back a portion of claims payments until the policyholder shows proof that repairs and replacements are indeed taking place. Insurers have argued that Florida is one of the few states that requires insurers to pay claims up front and does not require proof that claims are not simply being pocketed.
  • Reducing to three years the length of time a policyholder can re-file a claim, down from the five year window now on the books.
  • Shifting the burden of proof in contested sinkhole cases from an insurance company burden to prove damage wasn’t caused by a sinkhole to a policyholder burden to prove it was. It also would require sinkhole work to be under contract before full payment is made.
  • Placing restrictions on public adjuster advertising and capping commissions public adjusters can take on re-opened claims.
  • Allowing an insurer to cancel a policy within 45 days if state regulators determine the cancellation serves the public or policyholder’s interest.

The industry tried to push through a similar broad ranging bill last year, and were disappointed by Crist’s veto. Crist left office earlier this month, and Gov. Rick Scott is thought to be more sympathetic to the industry. Scott hasn’t specifically commented on the new legislation.

One notable omission in the new proposal from last year’s bill is a provision to allow insurers to raise rates up to 10 percent annually to adjust for inflation and changing reinsurance costs without having to go through full blown hearings before the Office of Insurance Regulation, which annually calculates increases in those cost drivers.

Comments

3 Responses to “Florida Lawmakers To Consider Ambitious Property Insurance Rewrite”

  1. David Huie Green on January 27th, 2011 1:37 pm

    we’re all sitting on potential sinkholes. Limestone is much further down around here, but go deep enough and you find some. The oceans are becoming more acidic with a build-up of dissolved carbon dioxide and a slight drop in pH will make it start dissolving the limestone, which is to say, among other places, the State of Florida.

    I’ve fished from fresh sinkholes along the Setinhatchee River. It runs underground, comes up, goes back under. Same thing, acidity of rain dissolves the limestone, removes support from below, collapses happen.

    David not thinking it will happen rapidly
    usually

  2. Chris on January 24th, 2011 4:03 pm

    The law does not get rid of sink hole coverage. If the ground opens up and swallows your house you will still be covered, its just refining insurance to make it more clear that a crack in your foundation does not suddenly mean there is a sinkhole.

    Fraud is the problem.

  3. Just listening and good at it.! on January 23rd, 2011 9:34 am

    I think that sinkhole omission should be stricken out of the insurance policy for any home owner. The home owner does not know if he is sitting on a pertential sinkhole any more than the insurance company does. It’s just part of the chance the insurance company should have to take, The same goes for Hurricane or any other type damage. The home owner does not control the weather and the Insurance company is not God but its part of doing business as a insurance
    company. Next thing, if the insurance company can get awy with it will be to determine that they will only pay for a house fire if there were no red flames in the fire They are in the insurance business and the State is to protect the people and not allow them to over charge the citizens and not be taking kick backs or otherwise..

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