One by one, homeowners strode to the speakers’ podium in the council chambers at Melbourne City Hall to tell their personal horror stories about the property insurance industry.
Policies canceled for no good reason. Being turned down for coverage by multiple carriers. Skyrocketing premiums. Insurers rejecting legitimate claims. Scams perpetrated to get “free roofs.”
Listening to it all were Florida Senate Majority Leader Debbie Mayfield and Florida Rep. Randy Fine, who promised that state legislators would take action to help correct the mess during a special weeklong legislative session that begins in Tallahassee on May 23 that will focus on property insurance reforms.
Looking for solutions: Property Insurance crisis: Florida legislators to hold ‘town hall’ in Melbourne
Insurance crisis: Enforcement is the best solution to Florida’s insurance crisis | Opinion
The legislators, along with several local elected officials, were on hand to listen to residents’ issues — and their suggested solutions — at the town hall forum on the property insurance crisis. About 75 people attended, and 19 addressed the panel during the two-hour-plus event.
Mayfield and Fine said this issue is the most common topic of calls and email from constituents these days.
“I think what we heard today is the same thing we’ve been hearing from all the constituents that are calling the office and emailing us,” Mayfield said after the town hall event. “Everything that’s being said is exactly what we keep hearing over and over again.”
Mayfield said the Florida Legislature tried to reach a deal on insurance reform during their regular session earlier this year, but the House and the Senate could not agree on a plan.
“We couldn’t make it over the finish line,” said Mayfield, R-Indialantic.
But she promised things will be different during the special session.
“I’m pretty confident we’ll have something” by the end of the weeklong special session, Mayfield said. “If not, Gov. DeSantis will extend the special session until we get it done. He is adamant that we will have an insurance policy done before we leave Tallahassee. Gov. DeSantis does want this issue fixed.”
Meanwhile, troubles have continued in the insurance market, with companies shedding policies and seeking hefty rate increases because of what industry officials say are large financial losses. Several insurers recently have been placed in state receivership because of insolvencies.
Part of the fallout also has led to thousands of homeowners a week obtaining coverage from the state-backed Citizens Property Insurance Corp., which was created as an “insurer of last resort.”
State leaders have long sought to shift policies out of Citizens into the private market, at least in part because of concerns about financial risks if the state is hammered by a major hurricane or multiple hurricanes.
There were lots of ideas kicked around at the town hall session.
Many were designed to reduce the costs for insurers in paying out claims, beyond what legitimately should be paid. That’s so that insurers would not lose money from their Florida business — and would not have to seek huge premium increases to make up for their losses, or drop their presence in the state entirely.
Among the ideas that appeared to gain traction were:
Cracking down on fraudulent claims for new roofs filed by unscrupulous insurance adjustors or others who get an “assignment of benefits” contract from the homeowner to handle the claim, in return for a cut of the payments. In many cases, the claims seek a new roof for something like “hail damage” that was nothing more than minor wear typical on an older roof.
“That ‘free’ roof isn’t free,” Fine said, noting that rate increases property insurers are granted by the state are tied to the amount of money the insurers pay out in claims.
Limiting how much money attorneys can receive from handling lawsuits involving insurance claims. West Melbourne City Councilman John Dittmore — who was on the panel and is involved in the insurance industry — said there is a disproportionate amount of payments to attorneys in Florida in property insurance cases, compared with the rest of the country, citing data from the Florida Association of Insurance Agents.
Mayfield said what’s known as “tort reform” in the lawsuit process will help “reel in some of these bad actors. Tort reform is a must. We are not going to solve this problem until we get tort reform solved.”
Tying how much money a homeowner can receive in an insurance claim for roof damage to the age of the roof and its current value, when taking into account depreciation. Proponents of that concept compared it to auto insurance, in which the owner of a 15-year-old vehicle that is totaled in an accident does not get the amount of money that would pay for a brand-new car.
Melbourne Mayor Paul Alfrey — who hosted the town hall event, and has been involved in both the insurance and roofing industries — said compounding the problem is that the number of property insurance companies doing business in Florida is steadily decreasing. Many companies are either leaving the Florida market or going out of business altogether, reducing competition in the industry.
That leaves Citizens Property Insurance as the only alternative for many homeowners who are unable to get insurance on the private market. Citizens was created by the Florida Legislature in August 2002, as a not-for-profit, tax-exempt, government entity to provide property insurance to eligible Florida property owners unable to find insurance coverage in the private market.
Citizens now has more than 851,000 policies in place, up from about 589,000 a year ago.
Palm Bay resident Luis Valdes, a former state insurance investigator, told the legislators he does not believe there are enough investigators in Florida to handle all the cases of potential fraud.
Dittmore said that also is true within the insurance industry itself, as smaller insurers might not have special investigative units in place to look into cases of suspicious claims.
Dittmore also said he is noticing that some property insurers now are limiting their policy-writing in Brevard County, much as they previously have been doing in some Central and South Florida counties.
“Brevard now is being treated differently” than some Florida counties where property insurance is more readily available, Dittmore said. He said that’s partly because there is a feeling within insurers that there are more cases of suspected insurance fraud in Brevard than in some other counties.
Dittmore is a former insurance fraud investigator who worked in that role for two insurance companies, and now is an insurance agent in the Melbourne area.
Fine encouraged residents with property insurance issues to call their legislators’ offices with their complaints.
“There are good actors and bad actors” in the insurance sector, said Fine, R-Palm Bay. “They’re not all good and they’re not all bad.”
Mayfield also directed some speakers to a member of her staff so they can provide details about the insurance companies, adjustors and roofers that may be colluding and profiting on their schemes.
Despite reassurances from the legislators that they will take care of the issue during the special session, some of the speakers expressed their concerns.
“I hope Mr. DeSantis is going to hear the voice of the people,” Satellite Beach resident Chuck Keith said, “without all of the yabber from lobbyists.”
This article originally appeared on Florida Today: Florida legislators from Brevard promise action on property insurance