Homeowners in Florida may not have to worry about rising insurance premiums despite Gov. Ron DeSantis's signing of a new law. The law cuts the Reinsurance to Assist Policyholders Program by $1.1 billion, reducing it from $2 billion to $900 million.
Many homeowners are concerned that with less public money available for insurers to use after major storms, premiums could increase. However, this may not be the case.
The Reinsurance to Assist Policyholders Program, or RAP, was created in 2022 during a risk crisis in Florida.
"It was only one layer of many in reinsurance," Mark Friedlander, Florida spokesperson for the Insurance Information Institute. "So even the companies that did participate in the past, they still had to go out and buy reinsurance on the private market. RAP was just a portion of a much broader reinsurance package that every insurer needs to operate in Florida."
With the signing of House Bill 5013, there is fear that insurers might turn to more expensive private markets, potentially leading to higher premiums for policyholders.
Friedlander shared a different perspective.
"The market is stabilized. Companies are filing for rate decreases or flat rates," said Friedlander. "We don't expect it to have any direct impact on consumers, as the trend continues to be very positive and improving for the market."
WINK News Reporter Amy Galo asked if the improving market could lead to lower or stable rates for homeowners.
"They are," responded Friedlander. "It's really important. We have talked with many insurance agents across Florida who are telling us they are recording their customers at significantly lower premiums. We're talking, on average, 20 to 50% less than what they were paying last year. Now that's not every customer, that's not every homeowner, but the trends are really positive."
Every home has its own individual risks, but this new law might make it a good time for homeowners to shop around for insurance.
That means even the old companies are getting competitive.
"It's absolutely worth taking the time to call your insurance agent, ask them to run some quotes," advised Friedlander. "We typically recommend getting at least three quotes. Take the time to do it because agents are confirming they are getting their customers better prices on insurance."