Homeowners may not see immediate relief with property insurance, experts say
TAMPA, Fla. - Florida is about a week into a new landscape for property insurance reform to stabilize the insurance market, but experts said there's still work ahead for homeowners to get relief.
Governor Ron DeSantis signed the changes into law last Friday, and insurance industry experts said it could take a year or more for premiums to go down.
"The good news for policyholders is that the legislature attacked the true cost drivers of high-end property insurance rates in Florida," said Michael Barry, the chief communications officer at the Insurance Information Institute. "There was a four-year period there where costs kept going up, and it wasn't because insurers were paying out because of hurricanes. It was because of excessive litigiousness and the extensive fraud that was occurring in the homeowner's insurance property market."
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Barry said reducing fraud and excessive lawsuits are big stabilizing the market.
"Florida was the home of nearly 80% of the homeowner's insurance property lawsuits in the nation. Eighty percent of them were occurring in Florida, and yet Florida was less than 10 percent of the total homeowner's insurance claims being filed," said Barry.
Previous: Governor DeSantis signs property insurance bill
Florida Gov. Ron DeSantis has signed two massive bills into law that legislators passed during this past week's special session, intended to overhaul the state's troubled property insurance system and provide over $750 million to communities recovering from hurricanes.
Insurance experts said the reform changes could draw some insurers back who left.
"In the long term? The answer is hopefully yes. In the short term, it's unclear because the new law is not retroactive," said Barry.
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That helps companies, but Republican lawmakers who pushed legislation acknowledge some drawbacks that some Democrats like State Representative Lindsay Cross find one-sided.
"There's no guarantee that people will see an immediate reduction or even in the kind of the medium term," said State Rep. Lindsay Cross, D-District 60 in St. Pete. "I think people a lot of people are going to see their rates continue to increase because come January, the insurance companies start to look at what their you know, their risks are and the cost of reinsurance. So I think some people, when they open their spring statements are going to be unpleasantly surprised."
It could take a year or longer to bring rates down, so Florida lawmakers said get ready to potentially pay more.
"It can't just be one-sided that only the insurance companies are benefiting. We know that the consumers, the rate payers are ultimately the ones that need some relief right now as well," said Cross.
More: Florida insurance commissioner resigns one day after special legislative session on property insurance overhaul
One day after lawmakers passed an overhaul of Florida's troubled property insurance system, state Insurance Commissioner David Altmaier submitted his resignation to Gov. Ron DeSantis. Over the course of his tenure, insurers have dropped hundreds of thousands of policies and rates have skyrocketed. Six insurers have been deemed insolvent this year alone.
If you can swing it, experts offered a tip to save money.
"I think from a consumer's perspective, I think the one thing you might want to do until these policy provisions really take effect is look for ways to reduce your premium. I would recommend the first order of business is, if you are in a financial position to do so, take on a higher deductible," said Barry, who said many homeowners may have deductibles that are too low.
Insurance experts said it took years for Florida to get into this position, so it will take a few years for the property insurance market to get out of it.