Gov signs property-insurance overhaul; market is still in freefall as hurricane season opens next week

A package of property-insurance measures adopted in special session this week by the Florida Legislature are now in effect, signed into law Thursday by Gov. Ron DeSantis amid projections that still more insurance companies will fail in coming weeks.

That would leave tens of thousands more homeowners scrambling to find insurance coverage in the opening weeks of the 2022 Atlantic hurricane season, which starts Wednesday.

The governor sounded a sunny tone about passage of Senate bills 2-D and 4-D, despite widespread concern that the proposed remedies are too little too late and won’t reap benefits for many months to come.

“This package represents the most significant reforms to Florida’s homeowners insurance market in a generation,” DeSantis said in a press statement. “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.”

In theory they could, but even the bill’s prime sponsor, Republican Sen. Jim Boyd, conceded in Senate debate this week that the measures likely will not save several insurance companies on the brink of insolvency from going bust before the measures can have their intended effect.

Boyd also conceded that provisions to drive down soaring premium rates on policies may take 12 to 18 months to take hold.

Homeowners and insurers are substantially at the mercy of companies that provide reinsurance for primary insurance companies to help pay claims from catastrophic events. Reinsurers are abandoning the Florida marketplace due to sharp increases in expensive claims, and analysts expect there will not be enough reinsurance capacity available in Florida to go around.

SB 2-D, in part, makes $2 billion of taxpayer funding available as reinsurance coverage to help companies that cannot obtain it in the private marketplace. Companies that participate do not have to pay back the money but are required to discount their rates. While the filings would be due June 30, the legislation does not specify when the rate decreases must take effect or how big they should be.

Other measures in SB 2-D and in SB 4-D aim to cut down on costs of litigation between policyholders and insurance companies over claims disputes; forbid insurers from refusing to cover homes solely for the reason that the roofs are more than 15 years old (other reasons would still apply); and establish new requirements for condominium safety following the deadly collapse of Champlain Towers South in Surfside last June.