Florida is prone to experience very violent weather events for the better part of a year. This phenomenon is caused by its long beaches and proximity to The Atlantic Ocean.The present climatic changes have caused many natural disasters in the area over the last five years.
This naturally causes huge payouts by the property insurance sector as claims. The unreliable and unexpected climatic factors combined with the equally unpredictable global instability have adversely impacted the insurance market. Consequentially, the insurance premiums in Florida escalated to unprecedented heights.
The lawmakers who had been witnessing these incidents for quite some time were anxious about the possible effect of these record heights scaled by insurance premiums. They decided to have a go at stabilizing the shooting premium rates and potential losses to the homeowners. They recently formed extensive insurance legislation creating a $ 2 billion reinsurance fund and rewrote the rules governing coverage repudiations and attorney remunerations.
The present legislation Governor Ron DeSantis signed offers short-term and long-term relief to Floridian homeowners in dealing with the rising insurance costs. Floridians see this legislation as the most crucial and inclusive property insurance reform of recent times. This bill endorses many pro-consumer clauses. They are expected to assuage the shooting insurance costs, increase insurance claim transparency and alleviate insignificant lawsuits which result in the general increase in costs.
Some of the significant provisions of Senate Bill 2D are:
- $2 billion in insurance relief through the Reinsurance to Assist Policy (RAP) program to benefit policyholders over the next two years. Insurance companies are to file a supplemental rate filing once enrolled in the program to provide relief to policyholders.
- $150 million for My Safe Florida Home Program to provide a grant to Florida homeowners for hurricane retrofitting, making homes safer and more hurricane damage resistant, which ultimately results in premium discounts for those who participate in the program.
- Prohibits insurance companies from denying coverage solely based on the age of the roof, if the roof is less than 15 years old, or if the roof has at least 5 years more of service life.
- Requires insurance companies to provide policyholders with a reasonable explanation if they deny or partially deny a claim and to provide consumers with greater access to information during the claim adjustment process.
- Creates a new standard for the application of attorney fee multipliers which have been liberally applied before, resulting in increased costs to consumers.
- Limits the assignment of attorney fees in property insurance cases, discouraging false claims.
Another Senate Bill (4D) on reforms to increase the safety of Condominiums stipulates:
- All condominiums and cooperative buildings that are three-storied or higher require inspections. (1)For buildings within three miles of the coast, Phase 1 inspection must occur 25 years after initial occupancy and every 10 years after (2) for all other buildings, Phase 1 inspections must occur 30 years after initial occupancy and every 10 years after. (3) If a Phase 1 inspection reveals substantial structural deterioration, a more intensive Phase 2 inspection is required.
- Condominiums and cooperatives are required to conduct structural integrity reserve studies for buildings three stories or higher to ensure the funding necessary for future structural repairs is available and prohibits waiver of funding for certain structural reserves.
- All structural inspections and reserve studies are to be part of the association’s official record and must be provided to potential purchasers of a unit, thus increasing transparency.
In Governor Ron DeSantis’s words, “These Bills will help stabilize a problematic market, help Floridians harden their homes through the My Safe Florida Home Program, and pave the way for more choices for homeowners”