The ratings agency Demotech has issued a release summarizing the major legislative reforms affecting Florida’s property insurance market, saying that the new rules have “redefined” the state’s market for the better.
According to Demotech – which has been reviewing and rating Florida’s residential property insurance market since 1996 – it personally witnessed the financial impact of the “disparate, disproportionate levels” of insurance litigation that plagued the state. But new legislation introduced and passed last year, along with additional considerations during the upcoming 2023 legislative session, will address some of these issues, the agency said.
In a release, Demotech president and co-founder Joseph Petrelli summarized the major provisions for Florida that the legislature has changed since Hurricane Irma in 2017:
In addition to the reforms, Demotech also took note of two very recent instances where Florida’s legislation took center stage.
On February 8, 2023, an intermediate appellate court reversed a trial court order related to compelling discovery of work product materials from an insurer’s claim file. The reversal meant that “an insurer’s claim file constitutes work product and is protected from discovery prior to a determination of coverage.”
Meanwhile, Governor Ron DeSantis, Senate President Kathleen Passidomo, and House Speaker Paul Renner on February 14, 2023, announced that they plan to eliminate one-way attorney fees and fee multipliers for all lines of insurance during the upcoming session this March.
All things considered, Demotech believes that catastrophe reinsurance coverage associated with policies covered by the June 1 and July 1, 2023, renewals will reflect and benefit from these cumulative reforms. It was projected that by September – at the height of hurricane season – about two-thirds of the residential property insurance policies in Florida will have been issued after January 1, 2023, and thus be subject to all recent reforms.
“The legislative reforms of the dual special sessions of 2022 are in place, as is the cumulative impact of previous legislative reforms,” commented Joseph Petrelli. “The Family Security decision stabilizes claims procedures, practices, and protocols.”
“Florida’s residential property insurance marketplace has been redefined,” Demotech’s president concluded in his statement.
Demotech’s release comes after the Insurance Information Institute (Triple-I) recently published an issues brief on Florida’s new insurance laws. Triple-I commented that Florida is “quite serious about fixing the fraud and legal system abuse,” if the new rules are any indication.
Is Demotech’s assessment of Florida’s property insurance market reforms correct? Let us know in the comments below.