Florida Bill Would Reduce Homeowners’ Insurance by 25%

If you own a home in Florida, you are probably aware of the huge increases to homeowners’ insurance in the past few years. The current average rate in the state is $6,000 per year. This is about triple the national average.

These rate increases have forced many Florida residents to leave the Sunshine State. The good news is that help is on the horizon.

Two political leaders from South Florida are moving forward on a bill that would lower the cost of homeowner property insurance by approximately 25% in Florida as well as other states across the nation.

Steve Geller, the current Broward County commissioner, presented a plan he says would greatly reduce the amount of reinsurance that Florida-based insurance companies must purchase each year to ensure they can cover all claims caused by a major storm. Those companies are required to purchase enough reinsurance to pay claims after a storm that has a 1-in-130-year chance of occurring. Geller claims that such a storm has never happened in Florida. A 1-in-50-year storm hasn’t happened in roughly 100 years.

Rep. Jared Moskowitz, from Coral Springs, submitted a congressional bill last May. It would require the U.S. Treasury Department to issue 10-year Treasury notes to cover damage caused by anything beyond a 1-in-50-year storm.

What this means is that insurance companies would only have to buy enough reinsurance to cover a 1-in-50-year event. That would reduce reinsurance costs by half. Because reinsurance costs make up half of insurance premiums, homeowners’ insurance rates would decrease by 25%.

According to a study by the South Florida Regional Planning Council, a 1-in-50-year storm currently costs insurers $62.5 billion. By using the Treasury note route, repayment would occur by charging all property insurance customers a special assessment of between 1% and 3% of their premiums for as long as 10 years. But this wouldn’t happen often, as storms over 1-in-50 years are extremely rare.

This plan would allow Florida homeowners to potentially save $838 million in premiums over five years. Annual cost increases would be greatly reduced as well.

This plan isn’t limited to just Florida. California, Texas, Louisiana and other states with a high risk of catastrophes could participate as well.

The savings on premiums would make this plan a good deal for policyholders. Florida already guarantees coverage for damages from storms, but homeowners are required to repay any amount that’s not covered by reinsurance.

Seek Legal Help

Inflation and other factors are causing insurance and other required expenses to rise dramatically. Fortunately, lawmakers are working to make life easier and help people save money.

Fort Lauderdale homeowners’ insurance lawyer Edward J. Jennings, P.A. can help you keep your home protected. If your home does suffer damage and your claim gets denied, we will fight for your legal rights. Schedule a consultation today by filling out the online form or calling 954-764-4330.

Source:

sun-sentinel.com/2024/03/14/reduce-insurance-costs-by-25-south-florida-backers-push-bill-they-say-would-do-it/