Crist signs insurance bill into law

TALLAHASSEE, Fla – May 29, 2008 – Gov. Crist yesterday signed property insurance reform into law, the so-called Homeowners’ Bill of Rights (SB 2860 by Sen. Jeff Atwater, R-N. Palm Beach). The final version of the bill included other bills that were added as amendments, and is the biggest insurance change to come out of the 2008 Legislative session. It offers a number of protections and upgrades for Florida homeowners.

In a letter issued by the governor, he says the bill “contains many important consumer protections that will help keep insurance costs more affordable for Florida’s homeowners.”

At the same time, however, Crist took the unusual step of vetoing one provision within the bill – a proposal to take $250 million from the Insurance Capital Buildup Incentive Program that covers Citizens Property Insurance deficits, and use it to entice private insurers to buy Citizens policies. While Crist says the “program is well intended,” the “funding source is inappropriate.”

The law becomes effective July 1, 2008, and makes the following changes:
 
• Extends the rate freeze for Citizens Property Insurance Corp., the state’s insurer of last resort, to January 2010. The freeze was set to expire in January 2009.
• Allows single-family residential properties and condos with a replacement value of up to $2 million into the Citizens insurance pool (up from $1 million, which was set to begin Jan. 1, 2009).
• Requires Citizens’ policyholders of property located in wind-borne regions and with an insured value of $500,000 or more to disclose the property’s windstorm mitigation rating to prospective buyers. (Language in an earlier version of the bill would have required all sellers to provide their property’s windstorm rating.)
• Increases fines for violations of the insurance code and for unfair trade practices by private insurers.
• Extends by one year to January 2010 a provision from last year’s insurance bill that requires insurers to get state approval before raising property insurance rates.
• Requires insurers to notify state regulators 90 days before dropping more than 10,000 homeowners’ policies in one year.
• Requires insurers to use state-approved methods to predict the risk of hurricanes, a key factor in setting rates.

© 2008 FLORIDA ASSOCIATION OF REALTORS®

Questions, comments or suggestions on this article? Have a news tip? Send a letter to the editor to: Newseditor@floridarealtors.org.