Florida Personal Line Coverage Reaches Crisis Levels – Part 2

Editor’s Note: Part 1 of “Florida Personal Line Coverage Reaches Crisis Levels” premiered on PropertyCasualty360.com on Tuesday, December 28, 2021.

Part of Florida Senate Bill 76, which came into effect July 1, 2021, prevents contractors, adjusters and businesses from using predatory ads that encourage Florida residents to make claims insurance for roof damage and fines up to $ 10,000 when companies break the law. (Credit: Devon Yu / Adobe Stock)

Due to several forms of loss, agents in Florida currently find themselves with fewer options when purchasing residential property coverage. A few major carriers like CNA, Travelers, and Chubb are still writing homeowners, but the restrictions are tightening around the wind, and a Florida real estate policy without wind coverage is almost useless.

Much of the property coverage to be found these days is provided by specialty / excess and excess insurers like Scottsdale (which recently took a rate hike from 12% to 70%), and these must be accessible through wholesale brokers such as Amwins, Johnson & Johnson, RT Specialty, RPS and XS Brokers. When these brokers’ own fees and commissions are factored in (around 5%), property insurance is yielding less and less profit for local agents, even though the premiums are high.

It has been very difficult to have renewal conversations with policyholders, some still recovering financially from the pandemic, and to explain to them why they are seeing double-digit increases in all areas, even for the best customers. As carriers quickly tighten their underwriting guidelines or pull out from large areas of the state, some customers are unable to complete some updates quickly enough to be eligible for further quotes. About a 30% increase in owner renewal with Scottsdale caused the client to choose to remove content coverage entirely and increase deductibles just to make ends meet.

Partly sunny

However, all is not completely lost. On June 11, 2021, Governor Ron DeSantis signed Senate Bill 76, which reduces the time limit for filing insurance claims, introduces a notice requirement, limits attorney fees and allows consolidation of related lawsuits. .

It also prevents contractors, adjusters and businesses from using predatory ads that encourage Florida residents to make insurance claims for roof damage and imposes a fine of up to $ 10,000. when companies break the law. One of the provisions of the bill prohibits contractors from prospecting neighborhoods with door hangers, business cards, magnets, flyers and other marketing materials encouraging consumers to contact a contractor or insurance adjuster. to file an insurance claim on their behalf for residential roof damage.

Just weeks after the bill was enacted, a federal judge granted an emergency injunction dismissing the part of SB 76 that banned certain types of advertising for contractors. Gale Force Roofing & Restoration, a Tampa Bay area contractor, has filed for an injunction, claiming that a provision in the law violates his First Amendment rights to commercial free speech.

It’s still too early to see what the impact of SB 76 (which only came into effect on July 1, 2021) will ultimately be, but at least it’s a step in the right direction.

I can tell you firsthand that while this practice is now (somewhat) illegal in neighborhoods, that doesn’t mean it has stopped. I attended a recent home improvement show in Miami, and the top three types of salespeople in attendance were, in that order: impact window installers, mattress salespeople, and – you guessed it – public fitters. , who offered free listings to have their home repaired at the expense of their insurer. The whole display of such a public fitter consisted of the phrase “#GetPaid” widely splashed from all visual angles.

The courts are also worth a visit. In October, three more appeals in assignment of benefits cases were in favor of Florida property insurers, proving that these carriers did not owe payment to catering contractors because insurance policy requirements failed. were not strictly observed (mainly involving the required signatures of both spouses). Two of these lawsuits were brought by Union Restoration, which filed at least 36 lawsuits against property insurers since 2015.

Agent options

So in this environment, what should an agent do? Most of the time they have to weather the storm and being part of a network can help.

Citizens Property Insurance Corp., the insurer of last resort for the State of Florida, currently adds about 4,500 policies each week and is expected to reach approximately 700,000 policies by the end of this year. This number is not sustainable and citizens could reach a breaking point where they will have to modify their eligibility conditions to get rid of some of these policies. These homeowners will need to find coverage somewhere, and independent agents in Florida will be the ones they turn to for advice.

Oscar Miniet is Regional Executive Vice President of Renaissance Alliance. He can be contacted at [email protected].

Reprinted with permission from Renaissance Alliance. https://www.renaissanceins.com/how-it-works/

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