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The Florida Legislature marched into Tallahassee last month for a Special Session on property insurance. With insurance premiums rising, Floridians were counting on them to enact changes that will drive those costs down.
But what actually happened?
The fruit of this labor was legislation that even its sponsor conceded won’t reduce rates in the next 18 months, if ever. A key ratings agency also says the legislative changes “are unlikely to alleviate immediate financial pressures.”
In other words, the so-called reforms do nothing to help Floridians struggling to find affordable property insurance.
But they did accomplish one thing: They took away rights from Floridians by making it harder for them to be made whole after suffering losses property owners thought would be covered by their insurance.
For years, the politically connected insurance industry has asserted that premiums have gone through the roof because home repair contractors conspire with attorneys to defraud the system.
The problem is that insurers zealously hold onto every dollar they can, routinely denying valid claims for necessary work done by contractors and screaming that the repair bills are rife with fraud. Then the insurance companies say that due to this supposed fraud, they need to charge higher premiums.
The reality is that painting small-business contractors as the boogeyman is a tired tactic designed to turn the spotlight away from the financial shell game that insurers play with YOUR premium dollars.
The shell game is this: Insurance companies make huge profits, and then divert large chunks of the money to companies they own. Then, with their bottom lines stripped down, they plead poverty and ask the state for higher rates.
Recent reporting from the Tampa Bay Times helped shed light on how a now-bankrupt insurance company called Sunshine State Insurance sent millions of dollars in fees to affiliated companies while paying exorbitant executive salaries. In fact, less than a year before the company went under, the CEO received a $200,000 bonus.
Why is this possible? Because our laws and the regulators who enforce them allow insurance companies to play these games.
That needs to change.
Perhaps one silver lining of the recently passed legislation is new transparency language, which will hopefully shed more light on these disingenuous tactics and give legislators more information they can use to enact reforms that will actually make a difference for consumers.
The bottom line is that the Restoration Association of Florida and our dozens of member companies across the state are challenging this new legislation in court because it unconstitutionally targets home repair contractors rather than addressing the real underlying causes of Florida’s property insurance crisis.
Our members – the same folks homeowners call when a tree hits their house or a pipe bursts in their kitchen – are being pushed out of business because insurance companies would rather fight claims in court than honor the coverage families have paid for.
Hurricane season is here, so let’s hope Florida’s contractor industry is strong enough to be able to help the families who need it most. If you’re having to deal with the impacts of a powerful storm, waiting for an insurance company to send out an adjuster months later just isn’t going to cut it.
Floridians deserve real reform that addresses the cause of this issue.
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Richie Kidwell is the president of Restoration Association of Florida.
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