Both the House and the Senate have given the green light to a bill about insuring second homes
As Florida continues to seek new ways to unload policies from its home insurance company of last resort, Citizens Property, the House gave its approval to a bill that could shift some second homes off the insurer and into the private coverage market.
The Senate already gave its approval to the bill
HB 1503 was passed unanimously by the Florida House after it had already received the Senate’s approval. Its next stop is on Governor Ron DeSantis’ desk.
The bill focuses on a number of issues having to do with the Citizens home insurance company. That said, the majority of the bill’s focus is on a “depopulation” program for the insurer. This means that its aim is to unload a number of policies currently carried by the insurer of last resort so that those customers are covered by the private market instead.
Changing the home insurance program in Florida
The existing program uses “admitted” insurers, which are companies that must adhere to certain state regulations on a number of factors, such as the rates they charge.
The new bill would broaden the new program for depopulation to “surplus lines” carriers, which don’t have to comply with the same kind of restrictions as carriers in the “admitted” category. Moreover, surplus lines carriers will also frequently provide coverage to properties that are associated with a higher level of risk.
Other changes in the bill
The bill also states that surplus lines carriers would be able to take on policies Citizens has offloaded for properties without a homestead property tax exemption.
The bill’s sponsor was Rep. Tiffany Esposito, R-Fort Myers. Its design included specific efforts to protect against a number of issues. For instance, acceptable surplus lines carriers for the depopulation program would be required to have a minimum A- financial strength rating from AM Best.
Citizens home insurance has grown very fast
Though intended to be a home insurance company of last resort, Citizens has skyrocketed in size in recent years as private carriers increase their rates and drop customers due to financial struggles. According to the latest data posted on its website, Citizens has 1.171 million policies as of the writing of this article.
In the second half of last year, the home insurance company hit its highest point at 1.412 million policies but implemented the depopulation program to bring that number down. That said, lawmakers are still working to shrink that figure due to the financial risk it would involve in the case of a catastrophe such as a major hurricane.