by Andrew Powell
Florida homeowners’ policies are becoming more expensive, but officials say improvements are in the offing as more companies enter the market.
On Tuesday, the Florida Senate’s Committee on Banking and Insurance heard an update from the state’s insurance commissioner and the state’s property insurer of last resort.
The insurance market in the Sunshine State has become overwhelmingly expensive thanks to many factors, including a glut of lawsuits against insurance companies, inflation and severe weather events.
Because insurance is also becoming increasingly difficult to obtain, many residents opt for coverage from the state-run Citizens Property Insurance Corporation, the state’s insurer of last resort.
During the committee meeting, Florida Insurance Commissioner Michael Yaworsky (pictured above) presented an update on the state’s property market. Yaworsky noted that the reforms made by the state lawmakers during the 2023 and 2022 legislative sessions were historic.
Yaworsky pointed out that since the legislation gone into effect, the insurance market is starting to see positive growth. Five insurance companies have begun doing business in Florida over the past year.
“We’re seeing pretty positive results again from the legislation that took place, a lot of companies are acting on optimism… People had to be convinced that this was a viable market to enter and that the future was relatively bright,” Yaworsky said, adding that there are at least two other insurance companies currently in the phases of forming.
Yaworsky also noted that inflation has a huge impact on insurance rates by pushing up the estimated costs to rebuild and repair homes destroyed by natural disasters. The huge flood risk in Florida compounds this even further.
President and CEO of Citizens Property Insurance Corporation Tim Cerio stated that some issues are not only people insured with Citizens, but most policyholders throughout the state.
“Clearly we have a mandate from the Legislature to be both actuarially sound and non-competitive… Currently, Citizens rates for the most part are actuarially unsound, typically 30 to 40% below market,” Cerio said, adding that this puts policyholders at risk.
Cerio added that Citizens should not be competing with private insurers, but that is exactly what is happening, and pointed out that there is an expectation that litigation will decrease as reforms begin to work into the system over the next 18 months when people begin to move once again back into the private market.
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Andrew Powell is a contributor to The Center Square.
The simple “4th grade average” answer remains to simply FUND the FL HCAT Fund to cover ALL “named storm” losses… including those from water pushed ashore by hurricane winds!!
This is the missing promise of using the FL HCAT Fund… how do we let 48% of our $14+ Billion residential property insurance premiums get brother-in-lawed thru “reinsurance banality”… not one slime $$Dollar$$ remains in the pot when business closes on the last day of policy terms!!
Florida needs perhaps $8 BN annually to cover 100% of ‘named storm’ losses including ‘water rising’… not a single dime thru reinsurance is built up… after paying CA Wildfires / LA Hurricanes / TX to PN Tornadoes!!
THEN, the same ugli renewal notices are sent Floridians to charge $10,000 premiums on coverage that cost under $1,000 during Hurricane Andrew … BEFORE we instituted the FL HCAT Fund to “solve this dilemma” of insurers not desiring to take on such risks!!
To jump start this use of State GOVT to actually solve our common problems, we need to heed Former FL House Speaker Marco Rubio’s lament that Save Our Homes at 3% will simply double property taxes over 20 years. By using a 6% Sales Tax WITH NO EXEMPTIONS, we split 3% to State and 3% to Local GOVT… AND eliminate all Residential & Business Property Taxes and all other local assessments. Taxing 85% of ‘gross receipts’ rather than current 35% means we also have $20 BN left over for shoring up the FL HCAT Fund.
Take 3 years to adjust the 6% rate… perhaps we end up with 4.6%? FLAT TAX means w keep half the property tax staffing to rigorously audit ‘gray cash market’ some claim might be 30% of sales avoiding legal Sales Tax currently!
WHY not such simple solutions… because the ‘funders’ of our Super Majority GOP Governance the past 25 years does not want such simple GOVT actions to make Florida #1 in the nation in efficiency of GOVT !!