Commentary: Brandes on Property Insurance Legislation | Jax Daily Record | Jacksonville Daily Record
In last week’s special session of the legislature, state lawmakers passed a menu of changes to Florida’s property insurance laws that supporters say are the first steps toward rescuing the property insurance collapse in Florida.
The session’s critics — mostly lawmakers who side with the Florida bar — say the legislation does little for Florida consumers and a lot to help what they call greedy insurers.
We will address the specific changes in a future edition. But here are closing remarks from Sen. Jeff Brandes, R-St. St. Petersburg, on the floor of the Senate during the extraordinary session.
Brandes, a logging company owner, is considered one of the most knowledgeable legislators on property insurance and the
The Senate’s most independent voice and thinker. His comments provide a clear summary of the bill that lawmakers were about to vote on and ultimately passed:
By Florida Senator Jeff Brandes | Borough 24
Thank you, Mr. Chairman. Senators, This is not the first time the Legislature has met in a special session on property insurance after Hurricane Andrew.
A very large storm that affected the southeastern part of Florida. It came together after the multiple storms of 2005 and 2006, which devastated many parts of Florida. And it meets today. Not because of a storm, though. But because of a man-made disaster.
This man-made disaster is the litigation that is destroying the property insurance market in the state of Florida. This has caused 79% of disputes in the nation’s property insurance industry to happen in our backyards. It is this man-made disaster that this bill seeks to address.
This bill is necessary, but not sufficient. There is still a long way to go for us to move this bill and the tariffs forward. We spoke to Sen. (Jim) Boyd (R-District 21) earlier and you heard and I believe businesses will fail on June 1. You will see several companies potentially losing their rating because they cannot enter into reinsurance treaties on June 1st.
The RAP program (Reinsurance to Assist Policyholders) is necessary and not sufficient. Litigation reforms are necessary here but not sufficient. When you’re ready to really step into the world of reform and take the deep dive that needs to happen, get rid of the one-sided attorney fees, get rid of the allocation of benefits like did North Carolina and Texas. You do these two things on the litigation side, the world will change overnight. Florida will become a competitive market again, and we will end the scourge of litigation and truly imagine returning to the current national average.
We should have less than 1,000 lawsuits a year in Florida, not 107,000 lawsuits like we did last year. Imagine what the rates would be in this world compared to the world we find ourselves in.
And finally, do one more thing, go to the real cash value on the rooftops. We could talk about franchises all day long. We can talk about changing structure all day long. Treat adults like adults.
You know what, if you crash your 2010 Toyota Corolla today, you know what won’t happen? Your car insurance company will not buy your brand new car. They won’t buy a 2022 Toyota Corolla, they’ll give you the money for the 2010 Toyota Corolla.
But you know what, you have a hailstorm on a roof that’s 20 years old. You know what we say to those property insurance companies, you need to provide a brand new, state-of-the-art 2022 roof. With all the bells and whistles and all the features, all upgrades to the current code.
Look, individuals who are homeowners are adults, they’ve chosen to buy a home. I believe they can work with their agent and read an insurance policy. I believe they can negotiate their insurance policy and determine if they want replacement cost, actual cash value, higher deductible. These individuals are adults, they have made adult decisions throughout their lives. They buy policies on all kinds of things. In fact, they can and we should trust them to buy the home insurance policy they want.
Let the market be the market. For the past 10 years, I have tried to be as much of a free market person as possible, the libertarian voice of this House. There are elements of this bill that I really like and that I find libertarian.
There are things that I think are not the 15 year provision that we don’t find in any other part of the country or any other state in the country. I think it’s a big government and I’ll call it that.
I understand that it is also not a provision of the Senate or a provision of the Governor. And I will call him too. But listen, every time you have a special session, you open Pandora’s box and you don’t know what comes out of it.
And there are parts of this legislation that I don’t think will be helpful to the market, like this provision, but you have no choice but to take to close the deal. This is where we are today.
We could potentially be back here in three weeks. I’m not saying that because, casually or as if I had nothing to do this summer. I say this because this market could be in a very different position three weeks from now if a number of these companies lose their ratings and can no longer carry insurance.
We need to find a way to get people to invest in the Florida market. We have to find a way to bring the rates down because at the end of the day, it’s not about corporations, it’s about adults. They are big boys and big girls in these companies. They can make their own decisions whether to invest or go into it or not.
But in the end, it is our friends and neighbors who suffer. It’s our friends and neighbors who open their bills and fall out of their chairs because they don’t know where they’re going to get the money to pay for their house. And having done nothing, we would find ourselves in a few years with many of our friends and neighbors paying more on their home insurance than they do on their mortgage.
Real estate insurance and property insurance are the Achilles heel of the Florida real estate market. And Florida is a state built on growth. Some people will say because we are the state of the free. I would say it’s probably a combination of the State of the Free, Sun, Sun, Air Conditioning, Mosquito Control. But all this to say that there is still work to be done.
We leave it in your hands. Many of us in this room won’t be back, or at least not any time soon. But we hope you can. We have to build, we have to bend the curve, first.
But we know what the best practices are. We can look around the country and see what other states are doing, but like those other states, we have to do everything they have done.
Let me end with this, you can add, you can make a cake by just following the ingredients.
But if you follow six of the 10 ingredients and add four that aren’t there, you won’t get the same product. We can claim we follow Texas law and we did for six of the 10 ingredients, but we’re not getting the same results.
Friends, it is for us to help our friends and neighbors.
This is Florida’s pocket problem today.
There will be more tomorrow.
But that’s today’s. You should support this bill. Not because it’s perfect, it’s not. Not because we’re going to see massive changes right away, it’s not, but because it’s starting to move the needle. It focuses our minds around this conversation and I guarantee you know 10 times more about property insurance after this session than you did in the previous five. You should support this legislation.
I plan to vote yes, you should too.