The Florida Senate has enacted legislation to force those claiming delayed and underpaid property damage to seek decisions outside the halls of justice. Florida Senate Bill 76 reduces the time for policyholders to file a claim, reduces recoverable attorney fees from insurance companies (making it difficult for policyholders to find qualified counsel when insurance companies pay too little) and enables the sale of weaker insurances that do not fully cover housing.
In social psychology, pluralistic ignorance describes a situation in which a majority of group members privately reject a norm, but still follow it because they mistakenly assume that most others accept it. This is also described as the spectator effect ̵
"The only thing that is necessary for the victory of evil is that good men do nothing." – Edmund Burke
Senator Jim Boyd is the author of SB 76. He is also an insurance agent. He claims that the steady increase in property insurance levels is driving the need for his proposed reform. He notes that the number of roof claims going to court has increased from about 27,000 in 2013 to more than 85,000 in 2020. Boyd fails to say that two of the most intense storm systems to land in Florida were hit during Boyd's statistical window: Hurricane Irma in 2017 and Hurricane Michael in 2018.
More than three-quarters of Florida's 21.5 million residents live in areas near the two coastlines. Six of the 15 largest metropolitan areas at risk of storm surge in the United States – Miami, Jacksonville, Tampa, Bradenton, Fort Myers and Naples – are all in the eye of "storm surge", wind-driven water strong enough to drive home from the ground. No other state has suffered more from storms and other hardships under the Boyd window. "Florida is constantly in Mother Nature's crosshairs," said Don Griffin, who leads research for the American Property Casualty Insurance Association (APCIA). Located between the South Atlantic and the steamy waters of the Caribbean Sea, six of the ten most expensive storms in our nation's history have ravaged the Sunshine State.
Insurance companies no doubt look back on the halcyon years 2006-2016, a period of more than ten years when no hurricanes hit Florida. A flood of insurance premiums was collected, with only a small stream paid on receivables. Insurance companies failed to find a David for their pharaonic dreamland. Instead, as the year of the party turned into years of storms and major hurricane payments in 2004 and 2005, Florida insurance companies announced that they needed to reduce operations and stop offering property insurance to residents. They claimed to have been amazed at the lesson Pharaoh learned over 3,000 years ago.
And they continue to pretend that the world is causing their problems. Boyd said the state Office of Insurance Regulation (OIR) plans that state-owned insurance companies are likely to double losses from 2019 to 2020. They are pointing the finger at Florida homeowners and already paying almost the highest home insurance levels in the country and warning should get ready for more bad news if and when their policy is next renewed. Why do homeowners have to suffer from poor management of a large global industry and not run better than the mom-and-pop convenience store on the corner?
Is it mismanagement, or is it something more ominous?
Senate Minority Leader Gary Farmer, D-Lighthouse Point, believes insurance companies are playing with their numbers. "They are hiding their profits. They pay them to sister and related companies, says Farmer. The house version of the bill requires insurance companies to allow the state to see what they pay affiliates to ensure that profits are not hidden. The farmer likes the idea and claims that previous insurance reforms have not been translated into customer savings. "Insurers just cook the books and come here crying poverty to us and everything is done on the backs of homeowners," Farmer said. The insurance companies together made anywhere from $ 240 million to $ 406 million per year just on their flood work since 2011 – without having to pay any claims.
Florida companies and 6.2 million homeowners see – or will see – double-digit interest rate hikes. as high as 45% in real estate insurance premiums as insurers cite balloon reinsurance costs, "loss creep" from the historic number of hurricanes over the past four years, coastal floods, forest fires in California and freezing temperatures in Texas that cause $ 60 billion in damage among factors which drives costs. Senate Proposal 76 reduces Florida policyholders' ability to sue and will cause financial pain to homeowners with older roofs. Homeowners can expect an increase of 30% to 50% next year even if the legislation is approved. The Senate panel pushed down several proposed amendments by Senator Gary Farmer, D-Lighthouse Point, who said advocates like Senator Brandes overestimated the frequency of relatively rare court decisions. Senator Perry Thurston, D-Ft. Lauderdale agreed with Farmer, saying that SB 76 is a solution in search of a problem and would leave Florida homeowners more vulnerable than virtually any other state and with limited access to the courts.
Florida Justice Association attorney Amy Boggs said SB 76 undermines consumers and benefits businesses. "It gives Goliath an even bigger club to beat David in the sand," she said.
Given Florida's policyholders who pay insurance companies to provide full coverage and quick payment of their insurance claims, it seems that many Florida Senators do not like David.