Property insurance rates in Florida are the most important issue for voters, solutions poor
Watch Hurricane Debby’s storm surge flood Fort Myers, Florida
Hurricane Debby is a Category 1 storm that poses a significant flooding threat to the southeast coast of the United States
When Florida voters head to the polls for Tuesday’s primary election — if they haven’t already — many will be thinking about home insurance, given skyrocketing insurance premiums and Hurricane Debby, which left four people dead and caused severe flooding across the state.
But parliamentary candidates have only vague plans for changing the system and few proposals for cutting interest rates in the short term.
“The Florida Legislature has no vision of where it wants to go in so many areas of public policy,” said former Sen. Jeff Brandes, a St. Petersburg Republican who championed market reforms before leaving office in 2022 due to term limits. He now heads the Florida Policy Project, a think tank.
“They have no plans,” he added.
Florida has the highest property insurance rates in the country. According to the Insurance Information Institute, homeowners will pay an average of $3,340 per year in 2023. That’s a 37% increase over 2021, or $903.
Property insurance rates in Florida are the highest in the U.S.
However, this national average may mask the fact that even higher rates are paid in higher-risk areas of the state.
Citizens Property Insurance, the state’s insurer of last resort that typically has the lowest rates, has 96,941 standard homeowners insurance policies in Miami-Dade County that average $5,113 a year. Citizens’ request for a 13.5% premium increase would push that up to $5,804.
The 71,196 policies in Broward County would increase from $5,385 to $6,112 and the 61,357 policies in Palm Beach County would increase from $4,904 to $5,561. The rate proposal is still pending with the state Insurance Commission.
The rise in premiums has put a big dent in Floridians’ wallets, putting the issue at the top of the election agenda. An Associated Industries of Florida poll of likely voters released Tuesday found that 22 percent of respondents named the cost of home insurance as the most important issue, ranking it second behind inflation at 27 percent.
There are few plans for lower interest rates on either side of the aisle
Democrats are hoping to capitalize on this problem, as they did earlier this year when Democratic Rep. Tom Keen of Orlando won a special election to win a seat previously held by a Republican, thanks in part to his strong commitment to lowering property insurance premiums.
“Unfortunately, things are not getting better for Republicans and they are not going to get better before the November election,” said Fentrice Driskell, Democratic leader in the House of Representatives from Tampa. Voters are “connecting the dots between the previous administration and their current bad situation with regard to the property insurance market.”
But even the Democrats’ ideas would hardly get through in the Republican-dominated parliament and would not lower interest rates in the short term.
In a special session in December 2022, Driskell filed a bill that would make the state’s insurance commissioner an elected position, establish a property insurance commission to evaluate the market, require companies that offer auto insurance to also offer home insurance, and explore a mediation program aimed at resolving disputes between insurers and homeowners. The bill never reached a hearing.
Another House bill, supported by some Democrats but introduced earlier this year by Republican Spencer Roach of Fort Myers, would make Citizens available to every homeowner. That bill also failed to reach a hearing.
Republicans point to several measures they have taken to address the problem:
- Pass laws to reduce the number of lawsuits to which insurers attribute a large portion of their losses.
- A tax cut of $447.4 million was passed on to reduce premiums.
- Put more money into a program that finances home rehabilitation to prevent storm damage during a hurricane, with the goal of lowering premiums.
During the 2022 special session, they repealed a law that required insurance companies to cover the legal fees of homeowners who successfully sue them in a damage dispute. It also eliminated the practice of subrogation, in which a homeowner signs over a claim to a contract that will repair the damage.
This year, in a larger tax cut bill, lawmakers passed a 1.75 percent cut in insurance taxes on homeowners and flood insurance and required insurers to pass the savings on to their customers. Homeowners are expected to save $447.4 million over the next two years.
The legislature also invested an additional $200 million in the My Safe Florida Home program, which provides homeowners with up to $10,000 to insure their homes against hurricanes.
The rising insurance premiums hardly relieve the burden on residents
These changes, however, have done little to alleviate skyrocketing premiums. A flood of lawsuits prior to the new insurance law’s passage has dampened its immediate impact. The tax cut will save the average homeowner $60 to $70 and will not take effect until October 1.
The My Safe Florida Home program was inundated with applications in July when the new money became available, and after two weeks the funds were depleted and no longer accepting applications.
Nevertheless, regulators believe the market has stabilized since the reforms were introduced. Twelve companies went bankrupt between 2021 and 2023. However, nine new airlines have been admitted to the Florida market since then.
The Office of Insurance Regulation recently released data showing that the average rate increase request over the past six months was 1.2%, with 12 companies requesting national average reductions. And reinsurance costs, a key factor in rates, fell 1.7% year over year, according to the OIR. (Reinsurance is insurance for insurance companies.)
However, premiums for homeowners remain stubbornly high, spurring federal candidates to offer solutions even though home insurance is regulated at the state level.
Republican U.S. Sen. Rick Scott of Naples introduced a bill that would allow homeowners to deduct up to $10,000 in premiums from their taxes. Whitney Fox, a Democratic candidate running against Republican U.S. Rep. Anna Paulina Luna of Tampa, proposed creating a federal disaster fund modeled on the National Flood Insurance Program.
Although there are no concrete plans to reduce insurance premiums in the short term, this has not stopped insurers from donating large sums to candidates and political committees during their election campaigns on the radio.
Insurance companies donate to candidates and committees in Florida
For the 2024 election cycle, the 20 largest private insurance companies donated $1.87 million to candidates and political committees, with the vast majority going to Republicans.
Slide Insurance Co. donated the most, with about $579,000, of which $110,000 went to the Florida Republican Party and $115,000 to the Florida Republican Senatorial Campaign Committee. Slide was founded in 2021 and has underwritten nearly 150,000 policies from Citizens since the beginning of 2023.
The litigation lobby, which fought in vain against recent insurance industry reform and now hopes to thwart its intended effects, typically opposes candidates supported by insurers.
The main focus of the fight this year is the Republican primary in the 7th Senate District. Rep. Tom Leek of Ormond Beach is an insurance industry executive backed by property insurers and other large corporations. David Shoar, the former Volusia County Sheriff, is funded by law firms.
The Daytona Beach News-Journal reported that at least $10 million has been spent on the campaign, which also includes financial adviser Gerry James. The winner will face Democrat George Anthony Hill II in November.
Gray Rohrer is a reporter with the USA TODAY Network-Florida Capital Bureau. Reach him at [email protected]. Follow him on X: @GrayRohrer.
