Coalition Pushes For Florida Insurance Reform
There’s strength in numbers.
At least that’s the belief when it comes to confronting the Florida insurance crisis and working towards and amicable solution.
Taking this mantra to heart, three large trade groups have banded together to form the Property Insurance Reform Coalition, which hopes to solve the state’s insurance crunch and curtail higher property insurance rates through legislation.
The coalition links the following powerful groups:
- The Florida Home Builders Association
- The Florida Association of Realtors
- The Florida Association of Insurance Agents
The newly-formed coalition has the backing and support of other groups such as the Florida Bankers Association, Florida Apartment Association and the Association of Florida Mortgage Brokers. The group plans to submit several proposals to state lawmakers and Gov. Jeb Bush on Friday, in hopes if discussing some solutions during a special session of the State Legislature late next month or early in December.
“The way we deal with the insurance problem is critical to the long term viability of the Florida economy,” said Scott Johnson, executive vice president of the Tallahassee-based Florida Association of Insurance Agents. “Meaningful reform will require more than a band aid solution.”
John Sebree, V.P. of the Florida Association of Realtors, agreed and added a different view.
“The impact of this crisis is being felt in every sector,” Sebree said. “Our people are suffering, our businesses are suffering and our economy is suffering. Everyone has a stake in this solution.”
New homebuyers are most affected by higher insurance costs, the coalition said. Higher home insurance rates, impact fees and property tax hikes are squeezing young families out of the Florida housing market, which in turn affects Realtors, home builders and mortgage lenders alike. Without action, the state is looking at a mass exodus of middle-income residents, some believe.
Johnson said skyrocketing insurance rates are such a big problem that they cause some buyers to walk away from deals as often as Florida home loan rates or taxes.
Meanwhile, builders have trouble obtaining risk insurance and the bottom lines of small and large business are being eroded slowly by rate hikes in commercial real estate insurance.
“If the legislature meets, which they are rumored to be, we’ll offer our proposals to them. These final recommendations support our pillars of reform,” Johnson said.
Bush has said he wants to schedule a session for late next month, when lawmakers return to elect leaders and set up committees for the upcoming legislative session. But Bush said he would convene lawmakers on the homeowners insurance issue only if there are issues that have already been agreed upon. The timing is critical because insurers set rates in January.
A number of recommendations are likely to come out of the committee to deal with ways to reduce the cost of reinsurance, including lowering the threshold in which state funds can be tapped in the event of a major storm.
“A lot of things happen in January, so we need to be ahead of the game,” said incoming Senate President Ken Pruitt, R-Port St. Lucie.
“This plan offers a well thought out approach by some of the best and brightest minds in our state,” said Douglas Buck, government affairs director for the Florida Home Builders Association.
“It provides a strong foundation for building long term solutions for addressing the complex needs of the current market.”
The Property Insurance Reform Coalition’s four-point plan to address the home insurance crisis:
- Spread the exposure and fund for wind insurance throughout the state.
- Redesign the structure and operation of Citizens, the state insurer of last resort.
- Reduce hurricane loss through more stringent building codes and establish incentive programs to harden homes.
- Encourage new insurance capital and increased competition through elimination of bureaucratic and regulatory barriers to protect the public from unfair trade practices.
