Heartland Criticizes Legislature’s Inaction on Meaningful Property Insurance Reform: ‘An Epic Disappointment’

The bill, SB 408, unofficially called the “Cost Drivers Bill,” advances certain free-market goals such as increased insurance rate flexibility and greater solvency requirements. It also cracks down on public adjuster practices that most insurance industry groups said were driving higher costs and allows insurers to withhold claims payments until contracts for repairs to homes are signed. It does not significantly address reforms to the Florida Citizens Property Insurance Corporation, does not bar the state from subsidizing property insurance in environmentally sensitive areas, and does not dedicate the state to investigating human causes of sinkholes.

“The Legislature did the right thing in addressing fraud and other cost drivers that are pushing up insurance rates on consumers. However, it is an epic disappointment that the Legislature failed to even take up legislation to address the enormous liability Floridians face through the Cat Fund and Citizens Property Insurance Corporation,” said Christian Cámara, Florida director of Heartland’s Center on Finance, Insurance, and Real Estate.

“Combined, these two state-run entities could foist on taxpayers the single largest tax increase Floridians have ever experienced should a hurricane strike,” Cámara continued. “If property, auto, renters, and commercial insurance rates are high now, imagine a 40 percent across-the-board tax on those already-high rates for decades to pay off the debt Citizens and the Cat Fund would have to incur after a hurricane. Hopefully House and Senate leadership will heed Governor Scott’s pleas for meaningful, market-freeing reform next year. Unfortunately, however, there’s a long hurricane season between now and then. Next session may be too late.”