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Fla. Lawmakers Pass Insurance, Condo Reforms

In a special session this week, the Florida Legislature passed a roster of bills to ease problems in the state’s insurance market, including SB 2D, which Florida Realtors heavily supported. Lawmakers also took steps to improve the safety of condo buildings.

TALLAHASSEE, Fla. – Florida lawmakers met this week in Tallahassee for a special session to help rein in rising property insurance costs throughout the state. Over the course of the three-day session, they amended their tasks to include condominium building safety, a response to the Surfside tragedy last June that killed 98 people.

“On the call of Governor DeSantis, lawmakers went to Tallahassee this week on a mission to address Florida’s ongoing property insurance crisis,” says Christina Pappas, president of Florida Realtors®. “I’m happy to report they not only made significant progress on that mission but went the extra step to help protect the safety and investments of current and future condominium residents.”

Property insurance reform

Lawmakers passed Senate Bill 2D which Florida Realtors heavily supported throughout the special session. On Thursday night, Gov. Ron DeSantis signed it into law. The bill includes a variety of reform measures designed to reduce frivolous lawsuits, crack down on roofing scams, provide reinsurance relief – a type of insurance for insurers when they face heavy claims – and empower property owners to harden their homes against storms. Some changes in the bill include:

  • Protecting Policyholders from Nonrenewal: Insurers may not refuse to write or renew policies on homes with roofs that are less than 15 years old solely because of the roof's age. 
  • Roof Solicitations: Requires roofing solicitations to contain consumer-awareness language that the homeowner is responsible for the deductible under the insurance policy, and it is insurance fraud for the contractor to reduce or waive the deductible or file a claim with false or misleading information.
  • Roof Deductible: Allows insurance companies to offer a policy at a reduced rate to consumers that includes a roof deductible of up to 2% of the insured value or 50% of the roof replacement cost. Roof deductibles will not apply when there is a total loss to the structure, a loss caused by a hurricane, a roof loss resulting from a fallen tree or other hazard, or a loss requiring a repair of less than 50% of the roof.
  • Assignment of Benefits (AOB) Reform: Eliminates attorney fee awards where policyholder benefits have been assigned to a 3rd party.
  • Contingency Fee Multiplier: Limits attorney fee multipliers to "rare and exceptional circumstances." 
  • Notice of Intent to Litigate: Allows insurers to collect attorney fees where a case is dismissed because plaintiff fails to provide required pre-suit notice. 
  • Civil Remedy Notice: Limits bad faith lawsuits by requiring policyholder to establish an actual breach of contract. 
  • Improving Affordability for Policyholders: Authorizes $2 billion for a new Reinsurance to Assist Policyholders (RAP) program to help insurers obtain reimbursement for hurricane losses earlier than they normally would under the Florida CAT Fund. This reinsurance is provided by the state at no cost to the insurer. Insurers that participate in RAP must reduce policyholder premiums.  
  • Home Hardening Grants: Appropriates $150 million to provide hurricane mitigation inspections and matching grants to help Floridians afford home hardening improvements to their homestead single-family residences with an insured value of $500,000 or less. The program provides $2 in grant funds for every $1 provided by the homeowner up to $10,000. 
  • Holding Insurers Accountable: Prohibits insurance companies from denying claims without communicating sufficient reason. Requires the state to analyze why an insurer failed within two months after insolvency process begins. Strengthens Office of Insurance Regulation insurer oversight.

Condominium safety reform

Florida lawmakers also addressed condominium reform by passing Senate Bill 4D, which DeSantis also signed Thursday. This bill provides an overhaul of the high-rise inspection law, requires more frequent recertification of safety standards and mandates that condo boards build up reserves so they can make needed repairs. Changes in the bill include:

  • Creates a statewide "milestone inspection" requirement for condominiums and cooperative buildings that are three stories or higher 30 years after initial occupancy, and 25 years after initial occupancy for buildings located within three miles of the coast. 
  • Requires inspections every 10 years after a building's initial "phase 1" inspection.
  • Requires an additional, more intensive inspection, or a "phase 2" inspection, if a building's initial inspection reveals substantial structural deterioration.
  • Beginning in 2024, condo associations are required to conduct a structural integrity reserve study at least every ten years and prevents needed reserves from being waived.

Both SB 2D and SB 4D became effective immediately after DeSantis signed them into law.

“Floridian’s have been struggling to keep up with rate increases, stay insured and find adequate coverage in their area,” says Pappas. “The measures passed by lawmakers this week will have a long-term positive effect on Florida’s insurance market. I’m proud of our members for staying engaged on this issue and continuing to demonstrate the need for these types of reforms. These policies may not immediately reduce premiums, but they do get at the heart of the problem.

Tom Butler is Florida Realtors Public Policy Communications Director

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