Florida Governor Signs Property Insurance Reform Bill
On May 26, 2022, Florida Gov. Ron DeSantis signed a bipartisan property insurance bill to provide some relief to consumers facing rising insurance costs within the state. This bill, known as Senate Bill 2B, is one of the most significant forms of legislation passed in an effort to alleviate ongoing challenges across Florida’s property insurance market. Specifically, the bill was implemented to help reduce rising insurance costs, increase claim transparency and limit the number of frivolous lawsuits that have contributed to elevated expenses. Keep reading to learn more about the bill.
The legislation within Senate Bill 2B provides $2 billion in reinsurance relief through the Reinsurance to Assist Policy program to benefit policyholders over the next two years. The bill requires insurance companies to file a supplemental rate filing once enrolled in the program to provide relief to policyholders.
Through this bill, Florida homeowners can receive grant funding to help make their homes more durable against storms, thus minimizing potential property claims stemming from storm damage. This initiative is being accomplished through the $150 million dedicated to the My Safe Florida Home Program. This program gives consumers the option to retrofit their homes for hurricanes and receive subsequent premium discounts.
Also, under the bill, insurance companies are no longer allowed to deny coverage based solely on the age of a policyholder’s roof if it is less than 15 years old or determined to have only five years of life left. Furthermore, the bill requires annual reporting of the average premium discounts for participating Floridians by the Department of Financial Services.
Claims Transparency Changes
Senate Bill 2B also restricts insurance companies from denying claims without communicating sufficient reasoning to policyholders. In other words, insurance companies will have to provide ample reasoning whenever they deny or partially deny a claim going forward. This change will help consumers have better access to valuable information throughout claims process. In addition, the bill requires insurance companies to provide policyholders with adjuster reports in a timely manner.
Anti-fraud and Legal Reforms
Senate Bill 2B also is intended to disincentivize frivolous lawsuits. In particular, the bill limits attorney fees for property insurance claims and insurance-related cases; such fees are one reason insurance companies have had to increase their rates. Litigation costs have increased and, therefore, insurance companies’ expenses for claims involving lawsuits have risen. By limiting attorney fees, the bill seeks to minimize overall litigation costs for insurance companies and, in turn, help lower rates for policyholders.
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Source: Office of Governor Ron DeSantis