House Amends Florida Property Bill SB 408

The Florida House held its second reading of SB 408 this afternoon, hours after Rep. John Wood, R-Winter Haven, filed a strike-all amendment and the bill was “temporarily postponed.”

Upon taking up the legislation, the representatives focused on a variety of specifics, including public adjuster reforms, actual cash value versus replacement cost value, sinkholes, time limits for claims, and rate filings. Speaker Dean Cannon, R-Winter Park, at one point noted, “We have been on the first amendment for an hour already, and there are 20 or so amendments.”

Rep. Evan Jenne, D-Ft. Lauderdale, had a series of questions in several areas. At one point, he asked if the bill did not “make it easier for consumers to have rate hikes.” The characterization was disputed by Rep. Wood.

Rep. Jenne also asked, “In the area of mitigation, are we not whittling away at mitigation discounts, here?” “No, you are incorrect,” Rep. Wood noted.

Regarding Citizens Property Insurance Corp., the state’s largest property insurer, Jenne said, “It appears to me that the surcharges could be as high as 45 percent. Can you explain to me how the surcharges could be as much as 45 percent?”

“That percentage is correct,” volunteered Rep. Jim Boyd, R-Bradenton, “because it applies to the three different levels of assessments.” If Citizens runs out of claim-paying funds, all insurance polices other than medical malpractice and workers’ compensation may be assessed.

Questions and Challenges

During the sinkhole discussion, Wood was asked by several representatives what structures providers would be required to insure. “Under these proposed changes, only the primary structure would be covered; that is the intent,” said Rep. Wood. “We are mandating to companies that they offer sinkhole coverage and catastrophic ground cover collapse coverage. We feel it is good public policy to limit that mandate to primary structures.”

Acknowledging the number of sinkhole questions from his colleagues, Wood described the sinkhole language as “very confusing.”

While Wood declared the bill “consumer-friendly,” other representatives did not share that view, and it was reflected in their questions.

Peter Nehr, R-Tarpon Springs, noted that, “This new bill allows for a 45-day notice of cancellation [shorter than current timelines]. Can you tell me why you did that.”

“That would apply only in the instance that an insurance company becomes insolvent, and it is to protect FIGA (Florida Insurance Guaranty Association),” Wood responded. The fast timeline will allow FIGA, which handles the claims of insolvent property and casualty insurance companies, to address the situation quickly. 

Rep. Luis Garcia, Jr., D-Miami, circled back around to rates, and asked, “How much will this raise rates?”

“What the intent of this bill is, is to address the cost drivers,” responded Rep. Wood.

Rep. Boyd added, “Rates still have to be filed and approved by the Office of Insurance Regulation. There is a method to make sure rates are adequate and fair and actuarially sound.”

Garcia asked again, “Bottom line: Is the cost of insurance going to increase, yes or no.” “I would predict, no,” Wood replied. Seemingly unconvinced, Garcia said he would save further comment for debate.

The strike-all amendment was finally adopted late in the afternoon on a voice vote; SB 408 now advances to a third reading in the House.