Scott Signs Property Insurance Re-write

By: Michael Peltier, The News Service of Florida
By: Michael Peltier, The News Service of Florida

THE CAPITAL, TALLAHASSEE, May 18, 2011 -

A sweeping and controversial measure aimed at reducing costs to property insurers and liability for taxpayers was signed into law Tuesday by Gov. Rick Scott, who said it was a significant first step in restoring the private insurance market in Florida.

Equally important, Scott said the measure (SB 408) will help lower the number of Florida coastal residents now insured by the state-backed Citizens Property Insurance Corp., the state’s largest property insurer with 1.3 million policies, by making it easier for private companies to compete.

“We’ve got to recruit other companies, other insurance companies,” Gov. Rick Scott said Tuesday in an interview with the News Service. “We’ve got to make sure Citizens goes back to being the insurance company of last resort.”

Among its changes, the bill allows insurance companies to charge more for policies that pay replacement costs up front while offering discounts to policyholders who opt to get reimbursed for lost items as they are replaced.

A major provision places more restrictions on sinkhole coverage. The law makes it easier for insurers to challenge claims and shortens to two years the window in which policyholders can file claims.

“This bill focuses on addressing cost drivers in the system and will yield long-term benefits for Florida by stabilizing the property insurance market and attracting new capital investment to our state.” Said Kevin McCarty, Florida’s insurance commissioner, who supported similar changes that were vetoed last year by then Gov. Charlie Crist.

Less enthused, however, were critics of insurers, led by Sen. Mike Fasano, R-New Port Richey, who said the changes left many policyholders at risk of losing private insurance altogether and being forced to go into Citizens – the opposite of one of the bill’s intended effects.

“Unfortunately, what happens next is that every home owner, every condominium condo owner, every mobile home owner, and every small business owner will be paying higher premiums to private insurers and will see their rates go up in the next 18 months,” Fasano said in an interview.

Scott’s decision drew immediate praise from the Senate sponsor, business groups, and the industry as a whole.

“(The bill) closes loopholes that invite fraudulent claims by restricting misleading advertising and misleading solicitations,” said Richter, R-Naples, sponsor of the bill. “It also attacks cost drivers in an effort to responsibly lower insurance premiums. With hurricane season quickly approaching, this legislation is critical to ensure a solvent industry that policyholders can rely on.”

The insurance industry lobbied the issue hard. State Farm, Florida’s second largest property insurer behind state-backed Citizens Property Insurance Corp, spent at least $150,000 for the quarter to press its case to lawmakers. FCCI, a regional commercial insurer, spent more than $250,000 in lobbying fees.

Business groups including the Florida Chamber of Commerce and Associated Industries of Florida lauded the signing Tuesday, calling the measure a good first step.

“We should not be requiring all Floridians including businesses, charities, homeowners, churches and automobile policyholders to pay hurricane taxes,” said Jose Gonzales, of AIF. “We should not be subsidizing million dollar beach homes on Florida’s coast and we should not be going into every hurricane season hoping for a miracle.”

Fasano, however, said he hopes to return to the issue when lawmakers return next year after policyholders feel the effects.

“Gov. Scott ran on a platform of no new taxes or fees,” Fasano said. “The law pretty much ensures that we will see a rise in fees, a tax if you will, on all rate payers,”


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  • by Frank Location: Palm City on May 18, 2011 at 02:50 PM
    Citizens is an Insurance Company run by Government. When has Government done anything efficiently. Citizens is wasteful and has made many deals with vendors owned by or related to employees or staffers without bidding. It's this rampant corruption that has increased costs and caused losses at the carrier. Citizens has paid outrageous amounts ($100k ) to employees and vendors for positions that essentially included answering phones. Stop the waste and make Citizens operate like a business in the private sector. Governor Scott is only sweeping up the cash for the Insurance Companies. Wasn't Governor Scott an Insurance Company CEO?
  • by Repubtallygirl Location: Tallahassee on May 18, 2011 at 09:16 AM
    Thank you Governor Scott!! Stay the course sir.
  • by tired of taxes Location: Tallahassee on May 18, 2011 at 06:00 AM
    If you understood the bill at all you would know that it is very good for the residents of Florida. Your taxes are paying for claims through Citizens Ins & something has got to change. This bill is intended to help bring private insurance companies into FL and reduce the number of homes being insured by Florida taxpayers. We also need to make sure people are getting their home's fixed after our tax dollars pay for their sinkhole claim. The way it is now most people take the money (our tax dollars) and go on vacation or buy a new house & don't have to answer to anyone about repairs... Every house in that neighborhood suffers because it kills the value of all their home, so it is like charging those neighbors twice. Democrats put the current system in place and my insurance premiums have tripled under democrats-without any hurricanes. There is no way you can blame that on Rick Scott.
    • reply
      by InsRep on May 18, 2011 at 06:45 AM in reply to tired of taxes
      You need to understand the bill better. Private insurance companies are "claiming" they can't make money. How do they make more money? BY RAISING YOUR RATES! If you magically eliminate Citizens (which, by the way, has policies other insurers won't touch even if you quadruple the rates) what will happen to policy rates? Politicians have vested interests. When will someone investigate that?
    • reply
      by Thom on May 18, 2011 at 06:57 AM in reply to tired of taxes
      You scenario is the rare-occurrence boogie-man that insurance used to scare this through the process. Make no mistake, insurance company profits, and not protection of tax dollars, was at the heart of this law.
    • reply
      by HMA on May 18, 2011 at 09:01 AM in reply to tired of taxes
      Most folks, including myself hate the insurance game and the massive profits the companies rake in. However state run insurance is a bomb that will explode one day. To the uninformed people complaining: 1. If there was a major hurricane next month, the state would be on the hook for $billions and be forced to raise your taxes to cover it. 2. If you can't afford it, move.
      • reply
        by Joe on May 18, 2011 at 10:22 AM in reply to HMA
        OK, so what is the difference between raising my current tax rate, and raising my property insurance 5 times higher than it is now? You pay more either way; except with option 1 (taxes) the state get our money instead of insurance companies.
  • by jes on May 18, 2011 at 05:25 AM
    The real benefit to the insurance companys is that they will have much more time to pay claims. There are familys in La. and Ms. who are still fighting with their insurance companies to pay claims from Katrina. Wake up voters, insurance companies are geared to get out of paying claims. When in the future when your house is destroyed by storms or fires, get used to long term temporary living.
  • by ThePowellReport Location: Tallahassee, Fl on May 18, 2011 at 05:17 AM
    I'm glad that people are starting to see that Governor Scott basically bought & lied his was into office. I hope that this will make people wake up & do more research into politicians, rather than just look at their commercials on TV during election time.
    • reply
      by Thom on May 18, 2011 at 06:28 AM in reply to ThePowellReport
      Exactly! Voters should NOT vote for the "R" or the "D" after a candidates name. Do your research. If you do not know anything or enough about a candidate for office DO NOT VOTE for him or her.
      • reply
        by Anonymous on May 18, 2011 at 01:41 PM in reply to Thom
        I am republican but do not vote for the "R" just because I am registered "R". I wish there were no party lines. I surely didn't vote for Scott, he was and is a big snake in the bush and is proving it here. It amazes me how many people ignore the lawsuits and the kickbacks he has gotten. The new drug testing will go to his wife's company (his money too) yet no one seems to care.
    • reply
      by Dork on May 18, 2011 at 12:51 PM in reply to ThePowellReport
      How is Obama working out for ya?
  • by C'Mom Man on May 18, 2011 at 04:59 AM
    You people need to wisen up. You KNOW there is always a catch. He preached lower property taxes which will be offset by higher insurance people. Republicans will ruin this state. When will you figure that out? This man is not for the middle or lower class, he is a business man and has one goal. Thank you to all the uneducated clowns who listened to this man sell snake oil and believed a word of it. You get to reap the "benefits" just like all of us who saw this coming. Make a change next election, hopefully we will get someone with morals and values for the little man and give us our due.
    • reply
      by Anonymous on May 18, 2011 at 01:42 PM in reply to C'Mom Man
      It's not just the republicans. It is any corrupted politician and there are plenty on both sides.
  • by hatin and complainin Location: haterville on May 18, 2011 at 04:58 AM
    Most of you don't even know what you're complaing about. Must be a miserable existence.
    • reply
      by Anon on May 18, 2011 at 06:36 AM in reply to hatin and complainin
      You must not own a home and pay insurance. We don't live near water and our insurance (with no claims) has continued to climb alot faster than our salaries.
      • reply
        by hatin and complaining on May 18, 2011 at 07:13 AM in reply to Anon
        3 of them...and in the insurance biz as well. You don't have to insure, just stop borrowing other people's money. Oh, darn it!, that's the price you pay to obtain something you don't have...or the resources to get on your own.
        • reply
          by Anon on May 18, 2011 at 01:37 PM in reply to hatin and complaining
          Sorry to inform you but we own our home out right. If I were a gambler, I would cancel the insurance, however, I'm not so we pay.
        • reply
          by Anon on May 18, 2011 at 05:29 PM in reply to hatin and complaining
          We own our own home and the insurance is still high and going higher. Sure I could gamble and drop the insurance, but what fool would do that. So the insurance companies have us over a barrel.
    • reply
      by grady on May 18, 2011 at 01:23 PM in reply to hatin and complainin
      what a surprise that you are in insurance. couldnt think of a more parasitic job but it does explain your selfish attitude.
      • reply
        by hatin and complainin on May 20, 2011 at 07:39 AM in reply to grady
        Hey GRADY...why don't you get a clue. I don't care if you live in a mud hut at the bottom of a drainage ditch. You need to educate yourself. You call someone selfish, well I call you a leech. You're probably the type that tries to defraud insurance comapnies and buy rims for your beater you drive down the road. Sometimes, it's hard to believe but I actually go to bat for morons like you to get your money.
  • by BULL DOG Location: fl on May 18, 2011 at 03:19 AM
    IT IS GONNA BECOME A RICH MANS STATE IF WE THE PEOPLE DON'T GET RID OF THESE REPUBLICANS THAT ARE DOING US IN.
    • reply
      by Bye on May 18, 2011 at 12:53 PM in reply to BULL DOG
      Bye bye.
  • by Frank Location: Tallahassee on May 18, 2011 at 03:15 AM
    One has to remember that some of the things that were removed from law and that the Governor signed off on, were things that caused a lot of the high rate increases of 5 and 6 years ago.
  • by Don Location: Tallahassee on May 18, 2011 at 01:56 AM
    Gov Scott has indeed shown us what he thinks of the citizens that gave him his job.....CONTEMPT! Let's see, higher gas prices, higher food prices, now higher property insurance rates......But no raises in pay. I haven't had a raise in three years and most likely will not have one until I retire....BUT.. wait...given all the above, I won't be able to retire! Wow, thanks scott for taking that load off my mind! Can you spell ONE TERM WONDER!
    • reply
      by tm on May 18, 2011 at 01:01 PM in reply to Don
      ONE TERM WOUNDER is spelled O-B-A-M-A.
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