Ahead of a Special Session to revamp the state’s property insurance market, Americans for Prosperity-Florida has some suggestions.
AFP-FL State Director Skylar Zander said lawmakers should focus on bringing stability to the insurance marketplace.
“Floridians are currently facing one of the gravest threats to the state’s economy. The property insurance crisis simply must be solved, and it is going to take bold leadership to make it happen,” Zander said.
A list of specific suggestions tackles state-run insurance, roofing deductibles, tort reform and a number of other changes discussed in recent sessions but that failed to make it across the finish line.
The center-right organization cautioned how to handle Citizens Property Insurance, the state-managed insurer of last resort. “The state should limit the glide path, or cap on rate adjustments, to primary residences,” reads an AFP release. “When Citizens absorbs policies from an unsound insurer, the premium should remain at the prior rate until the Citizens rate exceeds it.”
Citizens Property Insurance board members voted last week to buy $4.3 billion worth of reinsurance coverage for $400 million.
AFP also wants to see a faster glide path for expensive properties.
“Rather than capping insurability via Citizens at a fixed dollar amount or some other nominal amount, premiums could increase faster for more expensive properties,” a release states.
And as many lawmakers worry if Citizens has the solvency needed if a major hurricane hits the state, AFP suggests that can be tackled long-term by requiring a building of reserves and comparable to private insurers. But the free market advocates also suggest Citizens should be set up for “eventual privatization.”
On roofing policies, the organization said some accountability measures must be put in place to ensure “transparency, accountability and integrity” regarding claims. AFP also wants reforms on the 25% rule, which requires that if more than 25% of a roof is replaced that an entire roof must be brought up to code.
The organization suggests looking at deductibles in such situations.
“Florida should provide insurers the flexibility to offer policies that include co-pays above the deductible,” a release states. “Competition would drive down premiums to actuarially match the homeowner’s increased cost-sharing, but the overall system would benefit by blunting third-party-payer cost insulation.”
In a broader sense, the lobbying group suggests dollar-amount deductibles on policies could be replaced with percentages on the insured values of home.
Regarding litigation, a key concern among the lawmakers who pushed hardest for a Special Session, AFP suggests a shift infrastructures that land many claims in court.
“The state should change systemwide civil litigation incentives so meritorious claims can proceed while discouraging frivolous claims that often get settled to avoid the costs of litigation,” a release reads. “The state should also reform high fee award multipliers.”
Zander also praised Gov. Ron DeSantis and Chief Financial Office Jimmy Patronis “for offering solutions to this critical issue, and we look forward to working with lawmakers to enact reforms that will help put Florida’s insurance market on the right course.”