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The Florida Roundup
The Florida Roundup is a live, weekly call-in show with a distinct focus on the issues affecting Floridians. Each Friday at noon, listeners can engage in the conversation with journalists, newsmakers and other Floridians about change, policy and the future of our lives in the sunshine state.Join our host, WLRN’s Tom Hudson, broadcasting from Miami.

Florida's home and condo property insurance market 'is collapsing – a mess beyond proportions'

Florida homeowners are seeing huge increases in the cost to insure their homes, further fueling the high cost of living in Florida.

A special legislative session begins next week, but hopes for significant reform are dwindling.

"Florida property insurance market is collapsing. That's the best way we can describe it. It is a mess beyond proportions," said Mark Friedlander, Director of Corporate Communications with the Insurance Information Institute.

As of noon on Friday, legislative leaders had not released any proposed legislative language that lawmakers will consider when the special session begins on Monday.

"I don't have a lot of confidence," Friedlander said. "They need to start taking a least first steps to get towards stability, no matter what comes out of Tallahassee next week. It's not going to fix everything. We are realistic about that, but they at least need to have a starting point."

Some insurance companies are canceling policies, limiting coverage and raising premiums by double digits. Other insurance companies are leaving Florida altogether or have collapsed, leaving property owners scrambling for coverage just as storm season is about to officially begin.

We are unequivocally in a crisis with regard to homeowners insurance," said Rep. Tom Fabricio (R-Hialeah), a member of the House Banking and Insurance Subcommittee.

Fabricio points to lawsuits as one factor driving insurance rates up. Data from the Florida Office of Insurance Regulation finds Florida is home to a massively disproportionate number of homeowner insurance lawsuits. In 2019, 1 in 12 insurance claims by homeowners nationwide were made in Florida. Yet three out of four lawsuits filed nationwide were in Florida.

"So that's a lot," said Fabricio. "It's a lot of litigation."

He and others point to Florida's unique one-way lawyer's fees law and what are called contingency fee multipliers.

State law requires if an insurance company loses a claims lawsuit, the insurance company has to pick up the attorney’s fees for whomever sued them in the first place.

In addition, a 2017 state S upreme C ourt ruling s ai d attorney fee multipliers of 1.5 to 3 times the fees are not limited to "rare" or "exceptional" circumstances.

"That's a problem," Fabricio said.

Homeowners’ rates have jumped more than 20% as three Florida property insurers — Lighthouse Property Insurance, Avatar Property & Casualty Insurance Co. and St. Johns Insurance Co. — have all been declared insolvent since February.

Hurricane season begins June 1, which also is the state deadline for property insurance companies to prove they have insurance themselves. It's referred to as reinsurance. Prices for reinsurance have jumped, putting additional pricing pressures on premiums for homeowners.

Florida has a state pool of money acting as a reinsurance policy — the Florida Hurricane Catastrophic Fund. It has $11 billion paid for b y premiums from insurance companies. Some legislators have talked about lowering the premiums paid into the fund in hopes of insurance companies lowering the premiums they charge homeowners.

"It should be temporary. It should be 12 to 24 months, because I don't believe the state of Florida should get in the business of augmenting the reinsurance markets," said Fabricio.

Copyright 2022 WLRN 91.3 FM. To see more, visit WLRN 91.3 FM.

In a journalism career covering news from high global finance to neighborhood infrastructure, Tom Hudson is the Vice President of News and Special Correspondent for WLRN. He hosts and produces the Sunshine Economy and anchors the Florida Roundup in addition to leading the organization's news engagement strategy.