New property insurance legislation to take effect Jan. 1 in Florida

When the new year starts in less than a week, a number of new laws will take effect in Florida.

Among the new laws SB 2A, which involves the state’s property insurance industry and was passed just a few weeks ago.

The changes were made, in part, because of the recent hurricanes. After Hurricane Ian slammed the Sunshine State, dealing between $50 billion and $65 billion in estimated damage, Florida’s already troubled property insurance market was pinched even more.

Insurance companies had been dropping customers and raising rates because of financial problems. So state lawmakers gathered for a special session this month. The Florida Legislature passed SB 2A, which will do a few things starting in the new year.

First, the law creates the Florida Optional Reinsurance Assistance Program, or FORA. It’s a billion-dollar fund that will act as a financial safety net to bail out insurance companies in the event of a major catastrophe like a hurricane.

Republican Florida Senate President Kathleen Passidomo released a statement when the bill was filed, saying, “The goal we all share is for Florida to have a robust property insurance market that offers homeowners the opportunity to shop for insurance that meets their needs and budget. We also want to make certain that when damage occurs, claims are paid promptly and fairly.”

The law also speeds up the claims process. New claims will have to be filed within one year instead of two.

And it will also speed up the payout or rejection process, with companies required to make that decision in 60 days instead of 90.

The law also works to get more Floridians out of the state-created Citizens Property Insurance program, which was meant to be an insurer of last resort for property owners priced out of the private market. Under the new law, owners would be required to buy flood insurance and move to a private policy if there are any policies that are no more than 20% above the cost of a Citizens policy.

The law, which takes effect Jan. 1, also cuts the amount of time insurers have to do an on-site inspection from 45 days to 30 days.