– Republican Gov. Ron DeSantis signed a sweeping property insurance bill on Friday. How much and when it will work to stabilize the stormy market is another question.
Florida has struggled to keep the insurance market healthy since 1992 when Hurricane Andrew flattened Homestead, wiped out some insurance carriers and left many remaining companies fearful to write or renew policies in Florida. Risks for carriers have also been growing as climate change increases the strength of hurricanes and the intensity of rainstorms.
The bill new law will create a $1 billion reinsurance fund, put disincentives in place to prevent frivolous lawsuits and force some customers to leave a state-created insurer of last resort, Citizens Property insurance, for a private insurer, even if the policy costs more. It will also set more stringent deadlines throughout the claims process to try to insure homeowners don’t face coverage delays.
The insurance industry has seen two straight years of net underwriting losses exceeding $1 billion in Florida. Six insurers have gone insolvent this year, while others are leaving the state. It will also eliminate the state’s assignment of benefits laws, in which property owners sign over their claims to contractors who then handle proceedings with insurance companies.
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