Florida insurance companies, not homeowners, get $2 billion in taxable profits

TALLAHASSEE – About a dozen Florida companies have proposed plans to hold a $2 billion A taxpayer-funded plan designed to help struggling home insurance companies that would save homeowners about 1% to 3% on their annual premiums.

This will not affect the amount of money that millions of public housing owners have endured over the years – if the companies pass the money on to their customers.

The law creating the fund does not guarantee that the companies will pass the money to the consumers. Many are signing up at the same time to increase rates to cover the higher cost of private insurance, which they buy to protect themselves in the event of major disasters.

Republican state Sen. Jeff Brandes about Pinellas Park He said the current situation shows that Parliament has done little for companies and landlords.

He said $2 billion fund is “like doing Stage 1 treatment for a Stage 4 cancer patient.”

Reinsurance to Assist Policyholders, or the RAP program, was approved at a special meeting held by Gov. Ron DeSantis in late May after the Legislature failed to address the property insurance crisis during the regular session. DeSantis immediately signed it into law.

Insurance companies that want to participate this year need to do their best if they want to succeed June 30 The last date to apply is Office of Insurance RegulationThis is still looking for papers.

“OIR is urgently reviewing these submissions and ensuring that the submissions comply with the recently enacted regulations,” he said. Samantha Beckerinterview director of Office of Insurance Regulation.

Critics called it a wasteful business that would not bring money to consumers. It seems they were right according to the investment companies they offer.

“This is not what we fear, but what many MPs have said will happen,” he said Bill Newton, deputy director of the Florida Consumer Action Network, a nonprofit advocacy group. “When you invest so much money and say, ‘Look! Have a nice day,’ is what happens. But I’m sure he appreciates the idea.”

On the plus side, Newton said, the support system is supported by Citizens Property Insurancethe last state-sponsored insurance that has been the only insurance for about 940,000. Florida homeowners and is expected to reach 1.2 million by the end of the year.

“As long as they can provide affordable insurance, the market will be stable, balanced, and private companies will also have to lower their prices,” Newton said. “Citizens are what unites everything. Oh, and Citizens has been making money for years despite having high-risk customers. I think it is not difficult to make money in the insurance biz. “

Citizens have recently asked for an 11% increase.

Approximately, Florida Homeowners pay more $2,000 above the national average for property insurance.

Insurance premiums have risen since DeSantis was sworn in $1,989 in 2019, according to Insurance Information Instituteon the current average of $3,585according to Insurify, which offers online comparisons.

Reinsurance is insurance for insurance companies to cover claims that they have no money to defend. Reinsurance companies are not regulated by the state and have been fined because Florida’s insurers rely heavily on them to provide insurance coverage.

The RAP program gives air space to home insurers, allowing them to participate Florida Hurricane Catastrophe Fund earlier than they are allowed before they reach their dues.

The disaster fund starts when the hurricane starts $8.5 billion in damage and climb up $17 billion, but insurers must pay. RAP allows participating insurance companies to access the funds for free in the event of a loss $6.5 billioninstead of $8.5 billion.

The money does not go to the insurer unless there is a real disaster, such as a hurricane, and they are required to pay for the damage.

68 different articles from 59 companies show how much they can save based on free money. Deposits range from as low as 0.7% to 3.9%, with most being in the 1% to 2% range. Most of these changes won’t happen for several months.

For the average home owner, this means saving everywhere $36 to $143 year on $3,585 Homeowners process has gone approx $1,600 over the past three years.

These companies provided policyholders with pages of brochures and leaflets showing how to save money.

But the writing is all over the map. Some cited the dollar amount that would be returned to policyholders, while many simply pointed to the reduction in earnings that could be given to policyholders. Many protected their plans as trade secrets, a strategy that confused Rep. Anna Eskamani D-Orlando.

“People are in the dark and they want answers,” Eskamani said.

Some companies had problems accounting for their payments, damages and refunds, and government regulators had to explain them and make them correct their mistakes. At one point, officials told Berkley they were using incorrect growth numbers to determine insurance premiums and offered a way to get a more accurate cost estimate.

One company, First, ran the numbers and decided it wasn’t worth participating until OIR officials confirmed it.

Some companies applying for RAP have had financial difficulties.

United Property and Casualty of Petersburgone of the largest companies in Florida with 180,000 points, estimated total revenue of 1.2.

United stopped offering new policies in February and is considering a sale or merger to continue, the insurance company said. It recently asked the government for a 15% increase.

Federal National and Monarch, which recently lost tens of thousands of legal residents Florida in order to be a solvent, he calculated that he needs money 0.8%. Insurance giant Demotech downgraded Federated’s rating in April from “outperform” to “outperform.”

“Our fears have been confirmed that this special provision was more to support the insurance industry than to give consumers a break,” said Eskamani.

Republicans he rejected less than half a dozen changes in all House and Senate to deal with inflation, including a 5% increase, the requirement for insurance companies to pass on any costs that may be saved in case changes to consumers in the form of price reductions or refunds and the requirement that the data report in the bill include the impact of climate change on prices. .

“Citizens are becoming the insurance of the only place,” said Eskamani. None of this is permanent.

©2022 Orlando Sentinel. Go to orlandosentinel.com. Published by Tribune Content Agency, LLC.