New bill for Florida could mean higher property premiums

New bill for Florida could mean higher property premiums

Lawmakers in Florida are looking to create new restrictions on policyholders who submit property insurance claims.

A bill, known as SB 408, contains more than 20 provisions that could enable insurers to raise premiums for homeowners in residences close to the coast as well as inhibit damage claims in an effort to combat fraud. The bill is similar to one proposed a year ago by then Governor Charlie Crist, which was vetoed.

State law allows for a discount on insurance if a homeowner were to fortify their property and meet the state’s standards for being “storm proof.” SB 408 would allow insurers to raise premiums on homes if they can prove they are losing money from such fortifications. The bill would also ease restrictions placed on insurers in how much they can spend on advertising and commissions for agents.

A key issue to be addressed by the bill is rising costs associated with sinkholes. Supporters suggest that sinkholes are responsible for passively raising coverage rates, but the concern is that most claims appear to be frivolous. A large number of claims, primarily in the Tampa area, are in regards to small cracks in driveways and do not constitute being filed as damage associated with a sinkhole.

Two provisions in the bill have drawn the ire of opposing legislators. One being, insurers could opt out of offering coverage for sinkholes, and another that would require policyholders to pay for the testing of sinkholes. The fee for testing could add up to as much as $10,000.

There is concern that homeowners simply cannot afford to pay for such a test and will be unable to obtain coverage at all. Senator Eleanor Sobel says that this could negatively affect those with legitimate claims, leaving them stranded with damages they cannot fix.

Ruling on the bill was postponed Tuesday to allow for more consideration on its provisions.

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