New Florida bill could lower home insurance costs, advances in the House

A new bill in Florida that aims to help homeowners with their insurance costs is moving rapidly through the legislature.

HB 1399 has been introduced in the Florida House of Representatives, aiming to regulate property insurance affiliates. The bill passed unanimously through the House Commerce Committee on Tuesday. 

Pedro Gonzalez, a homeowner, shared his frustrations with paying for home insurance.

"Horrible. It's my worst bill," said Gonzalez. "I used to try to keep it under but it's gone over, and just keeps going up every year."

According to the bill, it seeks to bring relief by requiring insurers to provide documentation that proves financial transactions with their affiliates are fair and reasonable, increasing transparency.

Blake Chapman, CEO of State Insurance USA, said he's all for transparency. 

"But one of the things that I saw was fair and reasonable, and I think that that puts a lot of pressure on just the departments to define what those are," said Chapman. 

The bill defines an "affiliate" as an entity engaged in insurance business, controlled directly or indirectly by the insurer. Under the bill, insurers would submit audited financial statements to the Office of Insurance Regulation for review to ensure fairness.

According to the bill, the office would be authorized to impose penalties for violations, including fines up to $10,000 and suspension of the insurer's business license.

Chapman highlighted that fairness could vary based on the circumstances. 

"The cost to provide services for an insurance company can drastically change, depending on the day-to-day claim, or maybe at a time of a catastrophe, they might have to pay a lot more for those everyday services, just like a client would have to pay more for repairing their home after a hurricane versus when there's not a catastrophe, prices might be more reasonable and things of that nature," said Chapman. 

The bill would revise standards for determining if a property insurance rate filing is excessive, including consideration of affiliate profits and revenues. It emphasizes transparency and accountability in insurer-affiliate transactions to protect policyholders.

Despite the bill's potential impact, Chapman remains optimistic about the future for Florida homeowners. 

"I think transparency is good, but I do think a lot of the things that were put into place about two years ago," said Chapman. "We're starting to see, 1) a healing in the market, which ultimately is going to give more choices to the consumer, and they're going to start to see rate relief, and we're already seeing that, and so I would just be cautious of any bills that would maybe slow that correction to better rates for the consumer."

While the bill progresses in the House, it still needs a hearing in the Senate. If passed and signed into law, it would take effect on July 1.