Property insurance rates rising? Bill advances to Crist
By Julie Patel Sun-Sentinel Staff Writer
State lawmakers passed a sweeping measure last week to strengthen the state’s property insurance market by making it easier for insurers to raise rates.
The bill, SB 2044, goes to Gov. Charlie Crist. He has said he doesn’t support anything to allow rate increases, but he hasn’t made a decision on the bill, according to his staff.
It’s another bill that Crist – who is running for the U.S. Senate – can “hit out of the park” with a veto, said Bill Newton, executive director of the Florida Consumer Action Network, referring to the governor’s recent veto of a teacher merit pay measure.
Sen. Garrett Richter, R-Naples, and Rep. Bill Proctor, R-St. Augustine, said they worked with insurance industry officials as well as the governor’s office and the Office of Insurance Regulation to create a bill that would help insurers and consumers.
Insurance Commissioner Kevin McCarty praised the bill for addressing “some of the cost drivers causing instability.”
Consumer advocates were ambivalent. Newton said it’s a “mixed bag.”
“I’m not overly enthusiastic about the bill,” said Florida Insurance Consumer Advocate Sean Shaw. “There are a lot of things in it for companies, but there are a lot of things good for consumers, too.”
The bill requires insurers to file detailed financial information about affiliates they hire for some services and extends a law requiring regulators to approve rate hikes.
Last year, lawmakers passed a bill allowing rate hikes and reducing the state’s financial risk if a major hurricane strikes. That measure allowed insurers to increase premiums by up to 10 percent without full regulatory oversight for certain backup coverage costs.
The bill, which was passed Friday by the House and earlier by the Senate, was propelled by a backlash from the insurance industry and others to laws passed in 2007 and 2008 to help lower property insurance premiums.
In some cases, policyholders saw their insurance bills double or triple after hurricanes in 2004 and 2005.
Insurers say their premiums aren’t keeping up with costs because of the laws and a rule that required insurers to double certain discounts in 2007 for homeowners who fortified their homes against hurricanes.
The new bill allows insurers to raise base rates if they demonstrate the discounts are too high and include costs for inflation in the 10 percent rate hike provision passed last year.
The bill also targets the “cost drivers” McCarty referenced: It would lower claims costs by creating new restrictions for public insurance adjusters, hired by policyholders during claims disputes with their insurers, and a requirement for homeowners to file a windstorm claim within three years after a hurricane.
It also would allow insurers to withhold part of a claim until policyholders have a contract for repairs.