News 521 Proposed Changes Home Insurance Laws Spark Debate Florida Orlando Sentinel

Florida politicians are attempting to lure home insurance companies back into the hurricane battered state by proposing a new rate setting procedure. Currently, if insurers wish to increase rates by 25%, they have to go through a review in order to have the change approved. Under the new law, they would be able to enact rate increase from 10% to 25% without first seeking the blessing of the government.

Other changes included in the bill work in favor of full-time Florida residents by ensuring that those who claim the homestead exemption would face smaller rate hikes when Citizens Property Insurance, the state-run insurer of last resort, runs a deficit. Those who own non-homestead properties would face higher rate hikes. Also, homes insured for $1 million or more would not be able to receive coverage from Citizens.

Lawmakers anticipate a fight on the part of wealthier residents with expensive properties, part-time residents and owners of multiple properties. In order to appease some opponents, the bill includes provisions to make it easier for owners of older homes to get no-interest loans for upgrades that make their homes more resistant to hurricanes. The proposed bill would also earmark $100 million of state general revenue to go toward starting a damage prevention endowment.

State Sen. Steven Geller does not believe the bill will pass mainly because of the section allowing the rate hikes. He believes that given the opportunity, home insurance providers will raise their rates to levels that many Floridians will be unable to afford in the name of profit making. Other disagree saying that enticing more companies to do business in the state will spawn greater competition between insurers and thus act as a check on exorbitant pricing.

Read more: Changes proposed for insurance (Orlando Sentinel) Homeowners could face 25% annual rate hikes Florida House Republican leaders on Monday proposed allowing homeowner insurance rates to jump by 25 percent a year without any government review to entice more insurers to write policies in hurricane-torn Florida.