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Association Totals
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| Fees & Assessments Tracked at: |
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| HOAs, COAs & POAs: |
4150 |
| CDDs: |
577 |
| Condo Hotels: |
63 |
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E-Newsletters
Governor Vetoes FLA Property Insurance Reform
Lame Duck Gov. Vetoes Property Insurance Bill
From the President's Desk
The 2010 hurricane season began June 1. June 1 is also the day that lame-duck Gov. Charlie Crist vetoed the comprehensive property insurance bill passed in the closing days of the 2010 legislative session, citing concerns that the bill made it easier to increase rates for policy holders. The veto came despite the urging of the Florida Insurance Commissioner and many others who felt that property insurance reform was needed. There is good and bad news for Florida homeowners that comes with this veto.
 The process whereby insurance companies request rate increases from the Office of Insurance Regulation, which has the authority to approve or reject the increase, will remain in force. Homeowners must still be wary of "use and file" abuses, where companies raise rates without approval while they fight it out with regulators. This practice could result in temporarily higher property insurance premiums.
It is in everyone's interest for Floridian's to harden their homes against wind storms. The current system of generous Wind Mitigation discounts has survived, despite evidence that many homeowners are receiving undeserved discounts. Legitimate wind mitigation discounts are a win-win benefit for Florida homeowners.
Although all Floridian homeowners want lower property insurance premiums, there is a dark side to the current populist, politically charged environment with premiums driven from Tallahassee instead of being determined by the cost of property insurance risk. In the current environment, there will inevitably be more property insurance companies becoming insolvent.
Florida has not experienced a major hurricane since 2005, but property insurance companies may still be liable for old claims re-opened by public adjusters, and there are many small property insurance companies with limited capital surpluses that have stepped in to fill the insurance void created when some national companies scaled back on underwriting property insurance. Without knowing it, many Floridians face the risk of smaller property insurance companies filing for bankruptcy when the next CAT 4 hurricane hits.
The Florida legislature made a good-faith effort to pass a bill that reformed the Florida property insurance industry. I felt that it offered a good balance between Florida homeowners and the needs of the insurance industry. The June 1 veto justification is based on a populist miss-characterization of the substance of the legislation.
I would encourage Florida homeowners to do their own research before purchasing a property insurance policy, in the current insurance environment. Be careful of "use and file" abuses by insurance companies and be very skeptical about signing on with any of a number of property insurers that do not have the capital surplus to service their policy base and survive the next hurricane hit. A.M. Best Company is a good resource to use for Property Insurance company ratings.
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