Property insurance in Florida has become quite a challenge recently, with surging premium costs being driven by natural disasters, the rising price of reinsurance (fundamentally, insurance for the insurers), and a friendly litigation climate. Consequently, several major carriers are leaving Florida, further limiting Floridians to scour the insurance markets for tolerable policy premiums.
Is any relief available against rising insurance premiums?
Yes, on March 8th of this year, Governor DeSantis signed into law Florida legislature House Bill 7073(See line 3248, Section 56, Page 130), which provides a temporary (one-year) reduction for residential property insurance policyholders in the form of a discount against insurance policy premiums. The source of the discount arises out of the tax that insurers are charged on policy premiums. The legislation reduces that tax by 1.75%. It is these tax savings that the insurance companies are required to pass along to their policyholders. Similarly, the legislation requires that any policy providing residential coverage on a dwelling for which the insurer is charged a regulatory assessment (an amount equal to 1 percent of the gross amount of premiums collected by each insurer on policies of fire insurance) is likewise entitled to a discount against the policy premium.
Do insurance relief discounts apply to flood insurance policies?
Thankfully, the premium relief is also to be passed along to holders of flood insurance policies, also in the amount of 1.75% of the premium.
Are there any restrictions to the applicability of the discounts?
Yes, for purposes of this legislation, the term “residential coverage” applies to residential properties with a homestead exemption; the discounts do not apply to tenant coverage. In the event a policyholder does not receive the premium credit, application can be made for a refund upon establishing to the insurer that the insured property is homestead property and otherwise entitled to the discount.
Is the legislation and the deductions permanent?
The deductions created under this legislation are short-term only and cover policies that provide coverage for a 12-month period written between October 1, 2024, and September 30, 2025. The applicable deduction amounts are required to be separately stated on the policy declarations page.
This legislation is an attempt by our elected officials to recognize the negative effects rising insurance premiums can have on Florida real estate markets and an effort to take some action to reverse (or at least slow) those effects. At a minimum, the bill will save money for consumers. Should you have further questions regarding this welcomed legislation or how it may impact premiums on homestead properties, we urge you to contact or consult your local real estate attorney for additional guidance.
