There are some new changes coming for Florida property insurance in 2016. Read on to learn more about the Senate Bill 2D and Reinsurance to Assist Policyholders, the Catastrophe Fund, and the Roof Deductible. The state is putting the public’s safety first and SB 2D will help do that. This bill will also make property insurers more accountable for premiums and cancellations. This is an important step in ensuring consumers are protected from unreliable insurance providers.
Senate Bill 2D
After months of discussion, Florida Governor Ron DeSantis has signed Senate Bill 2D into law. This law includes provisions that will increase financial relief for struggling insurance companies, make Florida homes more storm-resistant, and address roofing scam lawsuits. In addition, it will allocate $2 billion to a new reinsurance fund, which would help home insurance companies share risk and reduce the risk of insolvency.The bill passed by the Florida Senate is called Senate Bill 2D, and will now move to the House of Representatives. It will likely not hold down policy rates or limit policy cancellations, but it will move the needle in the right direction. The bill does not mandate that insurers offer higher rates, but it does require them to offer lower premiums. Those who are not satisfied with current policy rates should look elsewhere.
Reinsurance to Assist Policyholders
New legislation from Florida Governor Ron DeSantis provides a reinsurance program for homeowners in the state. The legislation, called “Reinsurance to Assist Policyholders with Florida Property Insurance,” passed the Senate Appropriations Committee almost unanimously. The bill also calls for a two-billion-dollar reinsurance fund and changes to the attorney-fee structure for bad faith claims.
A special legislative session was held by the Florida legislature this past week to address the insurance crisis. The five-day session ended without any significant changes to two bills that were passed with overwhelming support. The bills aimed to help some property insurers reduce the cost of reinsurance while helping all other Florida residents deal with litigation and roofing claims. However, many opponents argued that the legislation won’t result in lower premiums for Florida homeowners.
Catastrophe Fund
A state-backed reinsurance fund of $2 billion may ease Florida’s property insurance crisis. Republican lawmakers unveiled the proposals late Friday, promising that the fund would stabilize Florida insurance companies and help them pay catastrophic claims. A public hearing on the proposals is scheduled to begin Monday in the Senate Appropriations Committee. The hearing will last about five hours. Here are some of the facts about the fund. First of all, it is self-supporting – residential property insurers contribute actuarially determined premiums to the fund, and revenue bonds backed by emergency assessments of various insurance premiums.
The Florida Hurricane Catastrophe Fund, or “Cat” for short, is an essential component of the state’s hurricane loss financing system. It was created following the devastating Hurricane Andrew in 1992. Although less visible than the Citizens Property Insurance Corporation, the Cat Fund is a statutorily mandated program that pays claims following major disasters. This means that property insurance rates in Florida will go down as a result of the fund.
Roof deductible
In recent years, the state of Florida has been grappling with an increasing number of roof claims, which is driving up premium costs and insurer losses. The state’s legislature, meanwhile, has failed to make efforts to curb incentives for roofing contractors. Some canvass neighborhoods offering free roofs, paid for in full by insurance companies. Insurers say this practice leads to higher premiums for all homeowners, and have urged lawmakers to restrict incentives for homeowners to file claims.
Currently, there is no stipulation that applies to the roof deductible in the case of a total loss of the primary structure, whether caused by a covered peril such as hurricane or fire. However, in many cases, the roof deductible may not apply in the case of roof damage puncturing the roof deck. Florida building code requires that 25% of the roof be replaced. This requirement is also triggered by a single tile or shingle, as the state’s building codes require roof materials to match.