As lawmakers return to Tallahassee for a special session, consumer advocates are hoping for solutions that don’t drive people out of their homes.
Consumer advocacy group Floridians For Honest Lending and insurance reform advocates, the Federal Association for Insurance Reform, released a set of priorities ahead of the special session, which will focus home insurance regulations.
The organizations published a educational video about the problem and possible solutions.
In this one, Paul Handerhan of FAIR suggested there was urgency for Florida-based insurance companies. The short-term crisis could unfold fully in June and July, he said.
“That’s when these major Florida national insurers can get capacity from their reinsurance programs,” he said, “or they can get it at a price that makes sense to their business models”.
He said the low end of the market is where the biggest challenges exist.
“The only thing the state can really do is provide public reinsurance capacity,” he said.
Laura Wagner of the FHLmeanwhile, points out that the hurricane season will sweep over Florida in the days following the scheduled close of the special session.
“We are nine days away from what should be a particularly active hurricane season,” she said. “Right now, the risk of increased foreclosures is growing in Florida due to double- and triple-digit increases in insurance premiums, rising property taxes, and insurance companies fleeing the state, which could lead many homeowners to adopt forced insurance policies, which offer little coverage and which many homeowners on fixed incomes have no means of affording. always lead to an increase in foreclosures.The legislator must act this week to stabilize the insurance market.
Handerhan said lawmakers must reform the Florida Hurricane Disaster Fund and “to provide some type of framework to provide reinsurance capacity below the Cat Fund at a rate that makes it economically feasible for these insurance companies to continue to do business without the threat of becoming insolvent”.
But advocates also said lawmakers need to look beyond summer and stormy season. Lawmakers are expected to tackle the rising cost of reinsurance this week, which in the long run will help lower primary insurance rates.
“What the legislature needs to do is it needs to look at every stakeholder group and say, look, are these guys playing with the system?” said Handerhan. “Then develop legislation to clamp down on those behaviors.”
Lobbying comes as groups like Americans for Prosperity urge lawmakers to review restrictions on solicitation by bad actors.
Handerhan in his video suggested that any visible effort to curb abuse of the system will at the very least send a message that “gaming the system will no longer be tolerated in Florida.”
Wagner also said it was important for the state to educate landlords about the resources available to them. This includes urging Floridians to apply for Homeowners Assistance Fund if they risk losing their home. We want all Floridians to know that the US bailout has allocated $676 million to Florida homeowners to help pay for housing-related expenses they may have fallen behind on due to the pandemic. This funding is available for expenses such as property insurance, mortgage payments, property taxes, homeowners association fees and internet,” she said.