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Florida Homeowners Insurance

Officials say recent reforms could help Florida's property insurance market


Florida homeowners' policies are becoming more expensive, but officials say improvements are in the offing as more companies enter the market.

On Tuesday, the Florida Senate's Committee on Banking and Insurance heard an update from the state's insurance commissioner and the state's property insurer of last resort.

The insurance market in the Sunshine State has become overwhelmingly expensive thanks to many factors, including a glut of lawsuits against insurance companies, inflation and severe weather events.

Because insurance is also becoming increasingly difficult to obtain, many residents opt for coverage from the state-run Citizens Property Insurance Corporation, the state's insurer of last resort.

During the committee meeting, Florida Insurance Commissioner Michael Yaworsky presented an update on the state's property market. Yaworsky noted that the reforms made by the state lawmakers during the 2023 and 2022 legislative sessions were historic.

Yaworsky pointed out that since the legislation gone into effect, the insurance market is starting to see positive growth. Five insurance companies have begun doing business in Florida over the past year.

"We're seeing pretty positive results again from the legislation that took place, a lot of companies are acting on optimism… People had to be convinced that this was a viable market to enter and that the future was relatively bright," Yaworsky said, adding that there are at least two other insurance companies currently in the phases of forming.

Yaworsky also noted that inflation has a huge impact on insurance rates by pushing up the estimated costs to rebuild and repair homes destroyed by natural disasters. The huge flood risk in Florida compounds this even further.

President and CEO of Citizens Property Insurance Corporation Tim Cerio stated that some issues are not only people insured with Citizens, but most policyholders throughout the state.

"Clearly we have a mandate from the Legislature to be both actuarially sound and non-competitive… Currently, Citizens rates for the most part are actuarially unsound, typically 30 to 40% below market," Cerio said, adding that this puts policyholders at risk.

Cerio added that Citizens should not be competing with private insurers, but that is exactly what is happening, and pointed out that there is an expectation that litigation will decrease as reforms begin to work into the system over the next 18 months when people begin to move once again back into the private market.

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