ORLANDO, Fla. — The speaker of the Florida House of Representatives said Florida’s insurance market was performing better than lawmakers expected when they passed a series of reforms last winter that were meant to stabilize the collapsing industry.
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His upbeat sentiment was punctured -- in part -- by acknowledgements that Floridians were still reeling from ever-increasing prices as they waited for the reforms to truly take effect, which he said lawmakers should have been quicker to implement.
“Are we seeing price declines? No. Is it bad? Yes,” Paul Renner (R-Palm Coast) said. “It’s going to continue like that until we continue to see fewer down arrows and more up arrows, but that’s happening as we speak.”
The “down arrows” included the price hikes and the pullout of Farmers Insurance and the cancellation of some AAA policies this month. Insurance industry insiders blamed Farmers for taking on too much risk too quickly for its troubles, which included a similar pullout in wildfire-prone California.
Renner pointed to Tailrow Insurance Company’s decision to enter the market as one of his “up arrows.” It was the first time a new insurance company entered, rather than quit, in years.
Other positive signs included private insurers’ decision to write more policies and more policies moving off the state-backed Citizens’ Property Insurance, which Renner attributed to a combination of the overall reforms and a specific law that prevents Citizens from writing a policy within 20% of a private insurance quote.
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“I think you could look at more aggressive steps to depopulate Citizens,” Renner said when asked what further steps lawmakers could take in 2024. “It wasn’t a fair market value [with the] government basically giving a subsidy.”
Insurance brokers have voiced concerns about the amount of risk Citizens has taken on, saying it has a fraction of the cash on hand it would need to cover another devastating storm. They also say it’s slowing down private insurers from reentering the market by undercutting the competition for otherwise ordinary homeowners.
The private insurance market is currently projected to crater in mid-to-late 2024, with competition rising and prices stabilizing and beginning to decline in 2025.
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Renner said he agreed with that assessment, but if progress isn’t made at the speed Florida’s leaders expect, lawmakers could go back to the drawing board to take additional action. He said he didn’t expect prices to go back to what they used to be, given the inflation the U.S. has seen over the past few years.
He added that he believes some early waves of progress will be seen after this year’s hurricane season if Florida doesn’t get hit by another major punch.
“All bets are off if we have a horrible hurricane season,” he said. “If we have a normal season, I think we’re going to continue to see positive developments, more up arrows and down arrows in the coming months… We can’t control what Mother Nature is going to do. That’s just a reality of living in Florida.”
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