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Florida’s homeowners insurance mess remains far from solved | Editorial

Originally published by Orlando Sentinel | View Story

By Orlando Sentinel Editorial Board

Gov. Ron DeSantis signed a bill last week that purports to partly fix the disaster that is Florida’s home insurance market.

Experts say the bill probably will help stabilize a market in which some property owners last year saw premium increases of 25-45%. But, oh, the size of the mess, and the amount that still needs done. This bill is no panacea, and this story has no heroes.

Years of Republican legislatures unwilling to buckle down to the complex task of regulating a complicated yet sensitive home insurance market here in the land of hurricanes have led Florida to the point where premiums are skyrocketing even as insurers suffered an operating loss of $1.6 billion in 2020. That’s the fifth straight year of losses since 2015. State legislators predicted during this year’s session that losses for 2021 would top $2 billion.

Among the casualties are 53,000 homeowners whose insurance companies got the state’s blessing to drop their policies, leading to a desperate scramble to find coverage just as the hurricane season was getting underway.

Florida’s 6.5 million homeowners can’t be expected to feel sorry for an industry that wields enormous political power and is charging $700 a year more than the national average, according to the National Association of Insurance Commissioners.

Still, the question must be asked: If homeowners are seeing staggering premium increases, and insurers are losing their virtual shirts, where is the money going?

Insurers and lawmakers predictably say the answer is lawyers — accompanied by a circus of adjusters and roofing contractors — who used the system to their advantage. It happened because Florida’s system was broken in a number of ways that led to a downward spiral, and legislators let it go on for years.

The troubles started in the early 2000s when several hurricanes caused huge insurance losses. Then came Irma in 2017 and Michael in 2018, prompting major insurers to flee Florida. A Supreme Court ruling in 2016 decreed that if a quarter of a roof is damaged by something the homeowner’s policy covers, then the entire roof must be replaced and the insurer must pay for it.

Let the party begin! That ruling prompted roofing companies to knock on doors to show homeowners damage and offer what’s called “assignment of benefit” contracts. In other words, the roofing companies and their lawyers would fight with insurance companies for payment on behalf of the homeowner. It was quite the deal for homeowners. Sometimes, according to the Insurance Information Institute, roofers would even offer the customer a $500 gift card to sign on. Now there’s an incentive that should scream something is wrong.

Another state law allowed roofing contractors to file a lawsuit on the homeowner’s behalf and if the roofer got any more money than the insurer’s first offer, then the insurance company was liable for legal fees of the homeowner.

During the session, Rep. Bob Rommel, R-Naples, cited a case in which a homeowner was awarded $35,000 for a new roof, while the attorneys cashed in for a cool $756,000 in fees. All this, over one roof.

“The money is not going to clients,” Rommel told Florida Politics. “It’s going to attorneys.”

Florida’s Office of Insurance Regulation compiled data showing that the state accounted for about 8% of homeowner insurance claims nationally but more than 76% of lawsuits filed by homeowners across the U.S., although that number’s accuracy has been challenged by a consumer group.

Senate Bill 76, which DeSantis recently signed, seeks to stop some of the practices that encouraged this continual round of lawsuits.

It cuts back on the ability of roofers to solicit homeowners door-to-door and is expected to curb lawsuits that result from contractors collaborating with lawyers. Neither contractors nor public adjusters are allowed to offer incentives to homeowners any longer. The bill also introduces a formula that seeks to limit attorney fees and reduces the time from three to two years to file claims.

That’s the good news.

The bad news is that even though DeSantis touted his commitment to “reduce the burden” of homeowner insurance, experts say that current premiums won’t drop. So much for consumers getting much of anything out of this.

And, customers of the state-backed Citizens Property Insurance Corp., the so-called last-resort for some homeowners to get insurance, will actually see higher rates. That’s hardly a win for consumers with water dripping onto their kitchen table.

A news release from the governor’s office touts the bill as a “thoughtful and bold reform package.” Let’s not go too far. This bill doesn’t work any immediate wonders, but if Florida consumers are very lucky — and no hurricanes emerge this summer to wipe out gains — the swirling market could begin to stabilize.

The Legislature and DeSantis should keep at it. The state’s homeowners insurance market remains an expensive and complicated mess for Floridians.

Editorials are the opinion of the Orlando Sentinel Editorial Board and are written by one of its members or a designee. The editorial board consists of Opinion Editor Mike Lafferty, Jennifer A. Marcial Ocasio, Jay Reddick and Editor-in-Chief Julie Anderson. Send emails to

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