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2022 PROPERTY INSURANCE CHANGES

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Summary

In December 2022 and May 2022, the Florida Legislature passed Senate Bills 2A and 2D and 4D, respectively, to make changes to property insurance in Florida. These changes include the establishment of the Florida Optional Reinsurance Assistance Program, reducing the deadline for policyholders to report a claim, amending the Unfair Insurance Trade Practices Act and prompt pay laws, prohibiting the assignment of post-loss insurance benefits, enhancing the Office of Insurance Regulation’s ability to conduct market conduct exams, and prohibiting contractors from making written or electronic communications to encourage a property insurance claim. The bills also make changes to the My Safe Florida Home Program, separate roof deductibles, roof age, and claims handling.

Q&As

What are the changes to property insurance in Florida in 2022?
The changes to property insurance in Florida in 2022 include the Florida Optional Reinsurance Assistance Program, changes to the prompt pay laws for property insurance, changes to the My Safe Florida Home Program, and a new policy for separate roof deductibles.

What is the Florida Optional Reinsurance Assistance Program?
The Florida Optional Reinsurance Assistance Program provides optional hurricane reinsurance that insurance companies can purchase at reasonable/near market rates. Reinsurance rates are expected to increase at least 50%.

What are the changes to the prompt pay laws for property insurance?
The changes to the prompt pay laws for property insurance include reducing the time for insurance companies to pay or deny a claim from 90 to 60 days, allowing the Florida Office of Insurance Regulation (OIR) to extend the 60-day period an additional 30 days if a state of emergency, cyberattack, or computer systems failure prevents the insurance company from meeting the time frame, reducing the time for an insurance company to review and acknowledge a claim communication from 14 days to 7 days, reducing the time for an insurance company to begin an investigation of a claim from 14 days to 7 days, reducing the time for an insurance company to conduct a physical inspection from 45 days to 30 days, and specifying that insurance companies may use electronic methods to investigate the damage and allows policyholders to participate in the use of such methods.

What are the changes to the My Safe Florida Home Program?
The changes to the My Safe Florida Home Program include providing funds to obtain free hurricane mitigation inspections and matching grants to harden the home to decrease the likelihood of damage caused by a hurricane, and prohibiting contractors from making written or electronic communications that encourage a homeowner to contact a contractor or public adjuster to make a property insurance claim for roof damage unless the solicitation includes certain information.

What is the new policy for separate roof deductibles?
The new policy for separate roof deductibles allows property insurance companies to offer a policy with a separate roof deductible of up to two percent of the Coverage A (dwelling) limit of the policy or 50 percent of the cost to replace the roof, whichever is lower. This is an opt-out endorsement, which means that you must be offered and allowed to decline the roof deductible by signing a form. If a roof deductible is added to your policy at renewal, the insurance company must provide a notice of change in policy terms and allow you to decline the separate roof deductible. Insurance companies must offer a premium credit or discount for selecting a policy with a separate roof deductible. The roof deductible does not apply to a total loss caused by a covered incident, damage caused by a hurricane, damage caused by a tree or other hazard that damages the roof and punctures the roof deck, or damage

AI Comments

👍 The 2022 Florida property insurance changes provide helpful information for policyholders, such as the My Safe Florida Home Program, which helps homeowners obtain free hurricane mitigation inspections and matching grants to harden their homes.

👎 The 2022 Florida property insurance changes also include a separate roof deductible of up to two percent of the Coverage A (dwelling) limit of the policy or 50 percent of the cost to replace the roof, whichever is lower. This separates the roof deductible from other deductibles and can be confusing for policyholders.

AI Discussion

Me: It's about new property insurance changes that will be implemented in 2022. Changes include the Florida Optional Reinsurance Assistance Program, reducing the claim filing deadline, prompt pay laws for property insurance, awards of attorney fees in property insurance lawsuits, and more.

Friend: Wow, that's a lot of changes! What implications do you think these changes will have?

Me: Well, the main implication is that insurance companies will pass on the increased cost of reinsurance to policyholders in the form of premium increases. Additionally, policyholders will have a shorter amount of time to report a claim and insurance companies must pay or deny a claim within 60 days. Policyholders will also be limited in their ability to assign benefits to a third party, and there will be more regulation of insurance companies. Insurance companies will also not be able to offer a policy with a separate roof deductible unless policyholders opt-in. Finally, policyholders will need to purchase flood insurance in order to have coverage from Citizens Property Insurance Corporation.

Action items

Research the My Safe Florida Home Program to determine if you are eligible for free hurricane mitigation inspections and matching grants to harden your home.
Review the Florida Optional Reinsurance Assistance Program to determine if it is a viable option for your property insurance needs.
Contact the Office of the Insurance Consumer Advocate to learn more about the changes to property insurance and how they may affect you.

Technical terms

Reinsurance: Insurance purchased by insurance companies to cover the increased cost of insurance premiums.
Claim Filing Deadline: The deadline for policyholders to report a claim.
Prompt Pay Laws: Laws that encourage the prompt payments of claims.
Assignments of Benefits: The process of signing over insurance benefits to a third party.
Office of Insurance Regulation (OIR): The agency responsible for regulating insurance in Florida.
Bad Faith Failure to Settle Actions: Lawsuits against property insurers for how they settled a claim.
My Safe Florida Home Program: A program that provides funds to obtain free hurricane mitigation inspections and matching grants to harden the home to decrease the likelihood of damage caused by a hurricane.
Separate Roof Deductibles: Property insurance policies with a separate roof deductible of up to two percent of the Coverage A (dwelling) limit of the policy or 50 percent of the cost to replace the roof, whichever is lower.
Arbitration: A legal process in which an arbitrator (a neutral party, usually a judge or attorney) addresses disputes in a property claim, including coverage.
Citizens Property Insurance Corporation (Citizens): A state-run insurance company that provides property insurance to Florida residents.
Flood Notice: A notice that must be part of the declarations page of an insurance policy and encourages policyholders to purchase flood insurance.