New legislation has been introduced after an investigation showed disaster estimate slashing.
Florida Governor Ron DeSantis (R) recently signed a new law that boosts home insurance company accountability for their claims handling processes.
The insurers will be required to comply with additional transparency and oversight regulations.
The new law requires home insurance companies to boost their process transparency and will be subject to higher fines for legal violations. The law also provides the regulators in the state additional authority to conduct investigations into allegations of bad behavior in a market currently struggling to stay on the good side of a complete crisis.
The Insurer Accountability Act was, in part, a response to an investigation by The Washington Post, which revealed that insurers had been allegedly cutting disaster estimates following Hurricane Ian.
The law was an uncommon bipartisan strategy introduced by Republicans, moving in direct opposition to several pro-insurer restructurings that have occurred since last year. Among those changes included one that made it more challenging for property owners to take legal action against their insurers.
Home insurance companies have also been sending rates skywards for several years in a row.
Bill sponsor State Senator Travis Hutson (R) stated that lawmakers were seeking improved oversight and “balance” in Florida’s market. That industry has traditionally held greater power than the state regulators. Critics and watchdog groups alike have pointed to the industry’s political donations and lobbyists as having had minimal regulator oversight and considerable sway over past legislation.
Components of the new law – such as stopping insurers from changing claims estimates without providing details about the changes, were partly in response to the Washington Post’s investigation, explained Hutson.
The investigation provided insight into how carriers had been allegedly making drastic alterations to claims resulting from Hurricane Ian damage. They had been allegedly reducing damage estimates without the knowledge or permission of the adjustors.
The new home insurance industry law in Florida will become effective as of July 1. It will include the new and stronger requirements for claims handling practice transparency. Insurers must also keep a list of all edit and/or keep all report versions for regulatory purposes. They will also need to submit their claims handling instructions to state regulators to ensure compliance.
