After nearly five hours of discussion and debate, the Senate on Tuesday passed a bill with major changes to property insurance laws.

The bill (SB 2A) contains provisions designed to bolster a beleaguered market. But critics allege the measure harms consumers in the process by driving rates up on state-run Citizens Property Insurance policyholders; removing one-way attorney fees for consumers who successfully sue their insurer; and allowing companies to offer discounts to homeowners who opt to resolve disputes through mandatory arbitration instead of through a lawsuit.

The vote was 27-13 along mostly party lines, with Sen. Linda Stewart of Orlando the only Democrat to support it and Sens. Erin Grall of Vero Beach and Ileana Garcia of Miami the only Republicans to oppose it.

“What about the (homeowners) faced with the inevitable sale of their home because they can’t afford it?” Garcia asked.

Garcia’s Senate District 36 seat includes part of Miami Beach along the coast, where many residents are covered by Citizens.

The bill requires Citizens customers in a flood zone to get flood coverage in addition to the coverage of a traditional homeowners’ policy. It also requires Citizens customers to move to a private carrier if they receive an offer within 20% more than Citizens’ rates.

Sen. Jason Pizzo, a North Miami Beach Democrat, noted that many of his residents live in condominiums many stories high and don’t need flood coverage. During a question-and-answer session on the bill before taking up amendments, he grew exasperated when Senate President Kathleen Passidomo prodded him to ask questions of the bill sponsor rather than debate the measure.

“Madam President, my constituents are getting screwed,” Pizzo said.

But bill sponsor Sen. Jim Boyd, a Sarasota Republican, argued the drastic measures were needed to bolster a property insurance market in crisis. Six companies have been put into receivership this year and dozens of others have either left the state, hiked up rates or canceled policies in the face of massive losses.

“This will help stabilize the market that is in virtual freefall. We cannot stand by and continue to let that happen,” Boyd said. “We do nothing and we’re going to be back in the spring with a huge problem on our hands.”

Insurers have lost $1.5 billion in 2020 and 2021, and companies have pointed to rampant, frivolous lawsuits as the major driver of the losses.

The bill seeks to address that by eliminating one-way attorney fees for property insurance lawsuits, removing the ability of a homeowner to sign over benefits to a contractor to pursue the claim on their behalf to kick start repairs, and allowing discounted coverage for consumers who agree to mandatory binding arbitration in lieu of a lawsuit in the case of a dispute over a claim.

Another major piece of the bill sets up a $1 billion reinsurance fund backed by taxpayer money. It comes on the heels of a $2 billion reinsurance fund approved by lawmakers in a Special Session in May to prop up struggling domestic insurance companies unable to afford or find reinsurance coverage.

Legislative leaders say it’s a temporary measure that will last two years until global reinsurance carriers, enticed by the tort reforms in the bill, return to the Florida market.

The bill now heads to the House, which is poised to take it up on the floor Wednesday. The bill passed through two House panels Tuesday, where critics of the bill contended it tilts the legal system in favor of insurance companies and against homeowners.

“In a David versus Goliath situation, I think this bill effectively gives Goliath a better helmet,” said Jonathan Albaugh, a Panhandle resident whose home was damaged and left uninhabitable by Hurricane Michael in 2018. After suing his insurer, the company went bankrupt earlier this year and his claim remains unpaid.

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