Florida Senate Advances Bill to Restructure Citizens Property Insurance

The Florida Senate’s Banking and Insurance Committee has recently approved Senate Bill 1106, a pivotal legislation aimed at restructuring the state-backed Citizens Property Insurance Corp. The bill, unanimously endorsed, proposes significant changes, primarily targeting higher-value homes in the state. If passed, the bill would increase the policy limit for homes insured by Citizens from $700,000 to $1 million. Additionally, it seeks to eliminate the ’glidepath’ limit that currently restricts Citizens’ premium increases to a maximum of 15% per year for homes and condominium units within this value range.

The proposed legislation, sponsored by Sen. Ed Hooper, R-Palm Harbor, also introduces a surcharge on policies either amounting to $2,500 or 25% of the premium, whichever is higher. This move is in response to the difficulties faced by affluent homeowners in finding affordable coverage in Florida’s strained insurance market. The current limit of $700,000, which has been in place since 2014 (except in Monroe and Miami-Dade Counties), is no longer reflective of the median housing prices, as pointed out by Hooper.

Committee member Doug Broxson highlighted the market’s ’doughnut hole’ - a gap in reasonable coverage availability for semi-pricey homes. This bill positions Citizens as a last-resort insurer, especially critical as the state awaits the stabilization of rates following recent legislative reforms aimed at reducing claims litigation.

Despite the intended benefits, the bill has garnered mixed reactions. The Florida Association of Insurance Agents supports the bill, while individuals like Gary Rosen and Robert Reyes have raised concerns about the potential impact on premiums, surcharges, and the fairness towards homeowners already struggling with insurance affordability. The bill must pass through two more Senate committees, the full Senate, and the House of Representatives, with a deadline of March 8, 2024, for the session’s end. If signed into law, it will take effect on August 1, 2024.