Property insurance bill only a start on needed reform Daytona Beach News-Journal
The recently passed property insurance reform law (Senate Bill 408) promises to lower homeowner insurance rates.
Eventually.
That's not exactly true either. It really doesn't promise to lower rates. Only politicians can do that. As an insurance agent and risk manager, I don't get to set the homeowners insurance rates our companies charge. I just get to explain them -- not an easy thing to do these days.
SB 408 is a good first step in fixing some things that were causing companies to raise rates or restrict writing new policies. Those fixes include no longer forcing companies to pay for repairs to homes when no repairs were made, and changes to the sinkhole part of your policy.
Prior to 2005, when you had damage to your home, the company paid you 80 percent of your damages, so you could get started on repairs or rebuilding. You then got the other 20 percent (called the holdback) when the repair was completed. The Legislature decided in 2005 that your company should pay all of the money up front. As often happens when laws are passed, unintended consequences show up. Since 2005, company losses increased 80 percent, due primarily to this change.
