Thank goodness for the Florida House. And thank goodness for Lloyd's of London. Both are demonstrating consumer-friendly positions regarding the Sunshine State's difficult property insurance situation.
A bad bill disguised as good
The House is pushing back on a Senate-approved bill that allows unregulated insurance carriers as alternatives to state-operated Citizens Property Insurance Corp. The state has been forcing some Citizens policy-holders into the private market to downsize Citizens and reduce the state's exposure.
But those so-called unregulated surplus lines of insurance carry big risks for consumers. They can increase rates at any time without state approval. Homeowners tempted by low initial premiums could later be saddled with crippling increases.
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These insurers also are not supported by a state insurance fund should they founder on claims payments.
House Speaker Will Weatherford, R-Wesley Chapel, has indicated the Senate measure will not reach the House floor during the final days of the session.
SB 1672's supporters ballyhoo the bill as giving property owners additional choices in the private marketplace. The House is not buying that line, thankfully standing up for consumers.
A solid private market
This year's partial rollback of the disastrous Biggert-Waters Flood Insurance Reform Act of 2012 brought relief from huge premium increases in the National Flood Insurance Program -- but not for everyone.
Even homeowners granted relief won't see cheaper premiums for eight months as FEMA slowly calculates new rates, and refunds are about a year away, Herald business writer Charles Schelle reported Tuesday.
While that's frustrating, the private market has entered the fray with lower premiums -- exposing the rate flaws in the federal program.
Lloyd's of London is writing private flood insurance policies in 19 states now after first landing in Florida.
Not all of the Lloyd's policies undercut NFIP premiums, and the highly rated company will not insure condominiums, mobile homes and certain other properties.
One example offered by BB&T Insurance Services in Bradenton shows the potential for consumer savings, Schelle reported.
Premiums on a Siesta Key home built below flood elevation before 1960 with a $144,000 in primary coverage and $25,000 for contents would cost $7,611 annually under new NFIP rates and $1,455 should the owner secure a grandfathered rate.
Lloyd's of London would charge $1,284.
Since primary homeowners won't be eligible for cheaper rates for eight months, and secondary homeowners are stuck with the higher rates, Lloyd's presents a strong option.
Other competitive alternatives are in the offing, too, as both the Florida House and Senate approved legislation this session creating a regulatory framework for other private flood insurance underwriters.
That, too, is encouraging. The bill awaits Gov. Rick Scott's signature.
Property owners should be the state's priority, especially given the potential for a downturn in the real estate market from high insurance rates and the resulting impact on economic development.
The House is proving up to that task by blocking SB 1672.