Florida Legislature Passes Two Bills to Alleviate State’s Insurance Crisis

By Chris Dawson, Attorney, FRSA. 

After a Special Session, major reform legislation passed. Learn what has changed and what the passed bills mean. 

In May, Florida Legislature held a Special Session to address issues with the states’ residential property insurance. An ongoing crisis, insurance and roofing companies have struggled to strike a balance to develop policies that help curb abuses in the market without creating unintended consequences. Over the course of approximately 72 hours, major reform legislation was passed on an issue that has been elusive for the past several years. 

Further, with overwhelming support from legislators, the Special Session was expanded to address reforms sought in the aftermath of the Surfside Condo collapse during the summer of 2021. Let’s recap the bills that passed.  

Property Insurance: HB 1D by Representative Jay Trumbull (R – Panama City) and SB 2D by Senator Jim Boyd (R – Bradenton)  

• Creating the reinsurance to assist policyholders program to be administered by the State Board of Administration.  

• Requiring certain property insurers to obtain coverage under the program. 

• Revising homeowner eligibility criteria for mitigation grants. 

• Requiring claimants to establish that property insurers have breached the insurance contract to prevail in certain claims for damages. 

• Requiring the Office of Insurance Regulation (OIR) to aggregate on a statewide basis and make publicly available certain data submitted by insurers and insurer groups, etc.  

Appropriation: $150,000,000  

Effective date: Except as otherwise expressly provided in this act, this act shall take effect upon becoming a law.  

Industry notes:  

• My Safe Florida Home Program – appropriates $150 million to the program to provide hurricane mitigation inspections and matching grants for the performance of hurricane retrofitting on homestead single family homes with a value of $500,000 or less.  

• Contractor solicitation of roof claims – prohibits contractors from making written or electronic communications that encourage or induce a consumer to contact a contractor or public adjuster for the purposes of making a property insurance claim for roof damage unless the solicitation provides: that the consumer is responsible for the payment of any deductible. It is insurance fraud for a contractor to pay or waive an insurance deductible and it is insurance fraud to intentionally file an insurance claim containing false, fraudulent or misleading information. 

• Separate roof deductibles – allows property insurers to include a separate roof deductible and an option to decline said deductible by signing documentation approved by OIR. If a roof deductible is added to the policy at renewal, the insurer must provide notice of change in policy terms and allow the policyholder to decline the separate roof deductible in favor of replacement value coverage (RVC). A permissible roof deductible under this provision is the lesser of two percent of the Coverage A value of the policy OR 50 percent of the replacement value of the roof. The roof deductible may not be applied if the loss is: (1) a total loss to a primary structure that is caused by a covered peril, (2) a roof loss resulting from a hurricane, (3) a roof loss resulting from a tree fall or another hazard that damages the roof and punctures the roof deck or (4) a roof loss requiring the repair of less than 50 percent of the roof.  

• Roofs-insurer underwriting – prohibits an insurer from refusing to issue or refusing to renew a homeowner’s insurance policy because the roof is more than 15 years old. For a roof that is at least 15 years old, the bill requires an insurer to allow a homeowner to have a roof inspection performed by an authorized inspector at the homeowners’ expense before requiring a homeowner to replace a roof as a condition of issuing or renewing a homeowners’ insurance policy. Additionally, if an inspection of the roof performed by an authorized inspector shows that the roof has at least 5 years of useful life remaining, the insurer may not refuse to issue or renew a homeowners’ policy solely because of roof age. 

Learn more about FRSA in their RoofersCoffeeShop® Directory or visit www.floridaroof.com.   

Original article source: FRSA