A group of insurers is hoping to move a series of bills through the Legislature this year that tackle some of their industrys toughest problems in Florida.
Some of the bills, like those addressing suspicious sinkhole claims, have been filed and are working their way through the committee process; others, like those attempting to make Citizens Property Insurance actuarially sound, are still being drafted by legislators.
Last month, representatives from State Farm asked state regulators for an average 28 percent increase in their premiums for homeowners policies in Florida, citing a jump in noncatastrophic claims, mainly due to sinkhole claims, as the primary reason the rate increase was needed. Other insurers are seeing increases as well, with $2.5 billion paid out in sinkhole claims in the last five years, most of which stemmed from cosmetic damage like small cracks instead of true sinkholes.
We have a sinkhole claims crisis in Florida, not a sinkhole crisis, said Sam Miller, executive vice president of the Florida Insurance Council.
Senate Bill 408 takes on the sinkhole problem by allowing property insurers to offer policies that dont include sinkhole coverage. This bill also includes other insurance industry changes, like establishing a three-year statute of limitations on hurricane claims. A similar bill that didnt include the sinkhole provisions was passed last year but vetoed by then-Gov. Charlie Crist.
Insurers are also eager to see laws passed that combat PIP fraud and those that stage auto accidents, but opponents of a bill filed last week in the House say it goes too far and gives insurance companies more leeway to reject valid claims.
House Bill 967, filed by Rep. Mike Horner, R-Kissimmee, would allow insurers to enforce provisions that arent included in a policy without making changes to the policy. Other versions of PIP reform are being drafted by Sen. Garrett Richter, R-Naples, and Rep. Jim Boyd, R-Bradenton, that extend the deadline for auto insurers to investigate and pay claims from 30 days to 120 days.
Supporters of PIP reform point to a nearly $50 fraud tax that falls on each vehicle each year due to increased costs related to fraudulent claims. But opponents are skeptical of the data provided by insurers. Sen. Rene Garcia, R-Miami, wrote a recent op-ed in the Sun-Sentinel that insurance companies havent released statistics on the number of fraudulent PIP claims in Florida, therefore lawmakers cant determine the depth of the problem or draft appropriate legislation.
But consumer advocates concerned about auto claims fraud say the reform bills are aimed only at bad actors, and do not overreach.
Were not changing PIP, PIP is PIP, were dealing only with the fraud issue, said Walt Dartland, executive director of the Consumer Federation of the Southeast.
Of course, private insurers will again attempt to achieve their long-sought-after goal of requiring Citizens Property Insurance, the state-run homeowners insurance group, to be actuarially sound. Private companies say Citizens has an unfair advantage by being able to offer lower rates.
Legislators froze Citizens rates in 2007, and their rates can only increase 10 percent each year. Private companies are hoping to raise that cap. Sen. Alan Hays, R-Umatilla, is currently drafting a bill dealing with the issue.
The Senate Judiciary Committee held a three-hour workshop last week in an attempt to grapple with bad faith lawsuits -- cases brought for the sole purpose of filing a second lawsuit with an insurance company that promises a greater payout. Details of that bill are still being worked out.
Reach Gray Rohrer at grohrer@sunshinestatenews.com or at (850) 727-0859.
