TALLAHASSEE – State Lawmakers Unveiled Friday Night law Project it would allow homeowners with older roofs to still get home insurance and create a fund for Floridians who want to upgrade their homes.
Under a policy plan unveiled three days before lawmakers return to Tallahassee to tackle Florida’s property insurance crisis, businesses would be barred from denying coverage because of age a roof if the roof is less than 15 years old.
And for roofs over 15 years old, insurers should allow homeowners to have a roof condition inspection before denying coverage. If the inspection shows that the roof still has five or more years of useful life, the insurance company could not reject coverage simply because of its age.
Ideas are intended to stop one of the worst side effects of the state insurance crisis. As insurance companies saw an increase in roof-related claims, they refused to insure homes with older roofs, dropping policies and forcing homeowners to spend tens of thousands of dollars on a new roof. just to get cover.
The proposals were announced after weeks of negotiations between House and Senate leaders and staff working for Governor Ron DeSantis, who earlier this week pledged “a very significant package” to deal with the crisis.
In addition to roofs, lawmakers are proposing:
- Allocating $2 billion to a new reinsurance program — insurance that insurers buy — to cover losses during hurricane season. Insurers who join the program are expected to reduce homeowner rates by June 30.
- Create a host of limits on attorney fees in lawsuits against insurance companies. Insurers have accused lawyers of causing double-digit rate increases for most Floridians.
- Allowing Floridians to receive up to $10,000 for home-strengthening improvements on their homesteads valued at $500,000 or less. Owners would receive $2 for every dollar spent.
“The proposal balances fair costs and consumer protections,” Sen. Jim Boyd, R-Bradenton, wrote to senators Friday night, “while adding reasonable safeguards for insurance companies against frivolous litigation. and fraudulent claims that drive up rates for everyone.”
Lawmakers would also take a closer look at insurance companies that fail. Within two months of the insolvency of an insurer, the state should draw up a report on the reasons for the bankruptcy of the company. Earlier this week, The Times/Herald reported that while state law requires such reports to be made, the reports are over years later and few people knew such reports existed.
The Office of Insurance Regulation would also create a new “insurer stability unit to increase regulatory oversight”, and the office would be required to open an investigation “when consumer complaints suggest a trend in the market rather than a isolated incident,” according to a summary of the legislation by the House of Representatives.
Lawmakers are being called back to Tallahassee because they failed to agree on legislation to address the property insurance crisis during their 60-day legislative session earlier this year.
While the changes announced this week could quickly resolve one aspect of the crisis — denials for older roofs — it’s unclear whether the changes will bring serious relief to Floridians who are experiencing double-digit rate increases.
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For months, observers and analysts have warned that without significant reforms, the home insurance crisis would pose a terrifying threat to homeowners.
“They will lose their homes. They are going to be forced to sell their properties,” Mark Friedlander, director of communications at the industry-backed Insurance Information Institute, told a panel hosted by a ratings agency on Thursday. “They can no longer afford the insurance. They’re going to have to ditch that lifetime investment of their home and put it on the market because now their premium is higher than their mortgage payment.
The proposed legislation would create an exemption in the state building code so that roofs that are more than 25% damaged but already meet the 2007 building code can be repaired instead of having to be replaced.
Insurance companies would also be allowed to offer policies with a separate roof deductible that would not exceed 2% of policy occupancy limits or 50% of roof replacement costs. Homeowners would be required to obtain a discount for choosing this policy, and the deductible would not apply if the home is a total loss or damaged by a hurricane, a fallen tree branch, or a roof loss requiring repair of less than 50% of the roof.