Sunday, November 29, 2020

Changes certain for the property insurance industry in 2011

Earlier this year, Governor Charlie Crist vetoed a bill (SB 2044) that would have been the beginning of a potential fix for Florida’s property insurance debacle.  However, the state will be ringing in the New Year with a new governor, which many believe will breathe new life into bills aimed at protecting insurance agencies and consumers.

Florida’s property insurance industry is in crisis.  While we have been extremely fortunate to not be hit by a hurricane for five consecutive years, our luck will eventually run out.  This is the exact reason why the insurance industry and the government are looking for resolutions to protect everyone.

Rick Scott & Charlie Christ
Rick Scott & Charlie Christ

In 2011, the Republican-controlled Legislature will focus on proposing new bills that will be very similar in nature to SB 2044 and will mostly likely have the support of new Governor Rick Scott.

Journalist Gary Fineout sums up a couple of the changes in a recent article in The Gainesville Sun about the prospective bills. He writes, “The proposed changes would make it easier for insurers to set rate increases of up to 10 percent annually. They would also put a three-year limit on when property owners can file a claim from a hurricane and would change how much insurers have to pay out initially for structural damage.”

The three-year limit on filing claims is credited to the public adjuster industry, which acts as an advocate for the policyholder.  Current legislation states that policyholders have five years to file a claim after a hurricane. Some critics believe that public adjusters are using this to convince homeowners to file claims before the deadline.  The numbers show that last year, roughly $700 million in claims were filed from the 2005 hurricane season. (Peltier, Naples News.)

What concerns the insurance industry is that while insurance rates remain the same, payouts from 2005 are still being dished out. When you combine that with five-straight inactive hurricane seasons in Florida, you can begin to see the need to increase premiums.  Insurance companies have only so many financial resources in the event of a major disaster.

The struggle is to determine a compromise between what will support the insurance industry—and ultimately the consumers—and what policyholders can afford in a recovering economy. There are no definitive answers, but it is certain that 2011 will bring changes to the property insurance industry in Florida.

Ellsworth Buck is the vice president of GreatFlorida Insurance. Contact him for questions and comments.

References:

Gary Fineout. (2010, December 5). GOP plans changes to help insurers who could increase rates up to ten percent annually. The Gainesville Sun. Retrieved from http://www.gainesville.com/article/20101205/ARTICLES/101209712/1109/sports?Title=GOP-plans-changes-to-help-insurers-.

Michael Peltier. (2010, December 5). Peltier column: Insurance matters likely to return. Naples News. Retrieved from http://www.naplesnews.com/news/2010/dec/05/peltier-column-insurance-matters-likely-return/.

Ellsworth Buckhttp://www.greatflorida.com/
Since 2003, Ellsworth has served as Vice President of GreatFlorida Insurance, a network of independent, franchised insurance agents located throughout Florida. During his tenure he has helped the franchise grow to more than 100 independent locations state wide. He is a 20+ year veteran of the Florida Insurance industry and is a graduate West Virginia University, earning his M.B.A in 1984. He lives with his wife in Stuart, Florida. For more information visit: www.greatflorida.com

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