Insurance Reform and Safer Buildings in Florida

On Thursday, May 26, 2022, Gov. Ron DeSantis signed SB 2D, legislation engineered to combat sky-high property insurance rates and help Floridians better defend their homes against storms. Efforts to improve property insurance claims by introducing more transparency and reducing frivolous claims also allow homeowners to save on higher insurance rates and related attorney fees.

DeSantis also signed 4B-D, which will require condominium associations to pass structural inspections for withstanding hurricanes. A $2 billion reinsurance fund has also been approved, as well, to help insurers better manage costs when handling spikes in insurance claims following a hurricane.

Overall, SB 2D and 4B-D are boons for homeowners in reducing costs and defending their homes (and insurance rates) following a hurricane.

What Do Senate Bills 2B and 4B Offer?

These measures aim to crack down on rising insurance rates for Florida residents along with frivolous lawsuits. These bills also increase resources to help homeowners and insurance companies better manage hurricane losses.

Helps Homeowners Save on Costs

These bills provide $100 million in closing cost assistance and down payments to qualified residents.

Expands Hurricane Relief Efforts and Requires Property Inspections

The Senate bills offer $150 million in grants through the My Safe Florida Home Program for participating homeowners needing government assistance to rebuild and harden hurricane-torn homes by doling out grants up to $10,000 to make hurricane-resistant improvements. It also requires inspections for all condos and coops that are higher than three stories. All condominiums and cooperatives must maintain structural integrity studies over the years, depending on how many people reside there and how close it is to the coast.

Enables a Smoother Claims Processes

To encourage transparency, insurance companies must submit a supplemental report to the state on an individual and group basis that will be made available state-wide on the office's website. Insurers also cannot deny coverage based on the age of a house's roof if it is less than 15 years old or has at least five years of life remaining. Insurers must perform an inspection of the roof instead of automatically denying coverage. This may increase the likelihood of a claim approval so homeowners aren't stuck with a considerable roof repair bill.

When it comes to denials, insurance companies must provide policyholders a reasonable explanation of why they deny a claim, allowing the homeowner greater access to information during the claim process to understand why they were denied and allowing them to better dispute a denied claim.

Reduces the Number of Frivolous Cases

DeSantis put out a call for homeowners to be aware of unscrupulous contractors, especially in the face of such legislation that seeks to reduce insurance fraud. In the past, homeowners would sign over claim benefits directly to contractors, which saw an increase in fraudulent claims like "roofing schemes."

The passage of this new bill will hopefully prohibit the ability to collect attorneys fees in fraudulent property insurance claims that have driven up litigation costs.

Supports Insurance Companies With an Expanded Reinsurance Plan

The RAP fund, or reinsurance plan, authorizes a $2 billion safety net for reinsurance for hurricane losses, requiring qualified insurance providers to enroll in the program and reduce insurance rates by the end of June, which could mean a savings anywhere from 3% to 4% for policyholders — however, most homeowners won't feel the effect for at least 18 months.

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What This Means for Florida Homeowners Moving Forward

During a special session in Tallahassee, the Florida Legislature overwhelmingly approved a measure seeking to stem property-insurance problems that have led to policyholders across the state losing coverage and seeing soaring premiums. These property insurance and condominium maintenance reform bills should help reduce many issues Floridians have been facing in terms of property insurance issues that have led to policyholders in Florida experiencing higher than normal premiums or losing insurance coverage.

For Florida homeowners, this looks like more protections and relief efforts to rebuild and harden homes against future hurricanes. Homeowners can also feel protected against insurers automatically denying coverage based on the age of the roof. Plus, Florida will start to practice more state oversight to prevent future failure of insurance companies through available monthly reports. Homeowners can save money on insurance rates and hurricane-proofing their homes through these efforts.

Shop Around for Affordable Insurance Rates in Florida

As demand for Florida housing continues to grow, so does the need for affordable homeowners insurance. Recent legislation reform seeks to stabilize the market and reduce insurance rates over time, which is great news for Florida residents. SmartFinancial can help new and current policyholders shop around for reduced rates from top insurers. Just enter your zip code below and answer a few brief questions to get you started with available and cost-effective options.

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