Opinion / Editorial by Florida Chief Financial Officer Jimmy Patronis
Since Governor Ron DeSantis took the helm, life’s gotten complicated for the Florida haters.
Life’s good in the Sunshine State, and people know that, so Leftwing activists have had to persuade the world not to believe their own eyes. Especially since they’ve been on a crusade against normalcy. After all, these are the people who were pro-school shutdowns but supportive of BLM riots; they don’t like law enforcement, but they pushed the NCAA to allow transgender folks to compete against women.
And when poor and middle-class Americans were having their savings siphoned away by runaway inflation, the Left was busy taking victory laps on “Bidenomics.” Normal people — even many Left-leaning people — don’t like any of this and Governor DeSantis’ Florida has always represented a counterweight to these Leftwing states.
For all of Florida’s many blessings, however, you don’t have to be an actuary to know that when it came to our property insurance market, Florida had its issues. I love Florida, but my own premiums have gone up 50 percent. This isn’t a new issue despite what you hear in the news.
A Unique Peninsula
Florida’s vulnerability to storms goes back to its land mass formation somewhere around 530 million years ago. Storms are a part of what it means to be a Floridian. We are a giant peninsula that sticks hundreds of miles out into the ocean.
In fact, other than Hawaii, we’re the only state with a good chunk of its population in the tropical zone. For anyone who’s ever listened to a Jimmy Buffet track (God rest his soul), that’s where the waters are really hot, which generates storms. But hurricane season wasn’t the only reason premiums were out of control.
Excessive Litigation
Florida’s insurance market was worse than it needed to be because we had bad laws that encouraged and rewarded litigation. Suing carriers became a profitable thing to do. We know that because Florida had 9% of claims nationally but had 78% of all litigation.
Contractors would go door-to-door telling residents they could get a discounted or free roof – and if the insurance companies fought back – then law firms could get back threefold what the actual claim was for, so insurance companies would just take the hit, and pass the expense to policyholders. You can’t have a healthy insurance market under those conditions, so insurance companies either folded or exited the market.
That was until Governor Ron DeSantis entered the picture.
Recently, Florida held not one, but two special sessions and the reforms were monumental. The fee multipliers that made litigating frivolous claims worth the effort were reined in. The assignment of benefit process, where contractors could acquire a homeowner’s claim, and do work before an insurance company could even take a look at it, was banned.
My Safe Florida Home Program
The state also worked to help policyholders by funding the My Safe Florida Home program, a grant program that provides free home inspections and grants of up to $10,000 for upgrading homes to make them less vulnerable to storms.
The average participant who realized savings from the program got $1,000 in savings on their premium. He even cut over $400 million in taxes for products to “harden” homes against storms, like impact-resistant windows, doors, and garage doors.
Leadership Matters
Thanks to the Governor’s leadership, we’re starting to see the benefits. Today, carriers are reentering Florida’s market.
Since the reforms, seven new insurance companies have come to Florida, which is a big sign that the bleeding has stopped. For many carriers, the rate of premium growth has been cut down, and we’re even seeing a few carriers cut their rates.
According to the state-backed insurance carrier of last resort, Citizens Property Insurance Corporation, litigation is down 20 percent and they’re seeing an 800 percent increase in requests from private insurers who want to take on these policies.
While we can’t pretend all is well, these are still signs of healing. The ship was headed towards an iceberg – now we’re headed to safer waters. That’s a direct result of the Governor and the legislature. Which brings me to my second point: all the criticisms the Left launched about Florida are boomeranging right back to their own backyards.
Insurance has become a disaster for many other states, including ones with Leftwing leaders. Carriers are exiting California, and since 2022, Oregon and Illinois have seen insurance rates jump above 20%.
According to the Wall Street Journal, 31 states have had double-digit rate increases. Nationwide, rates were up 21% last year, and the year before that – 12%.
Of course, some of that has to do with Joe Biden’s inflation crisis. When construction costs are approximately 38% higher than a year or two ago, rebuilding your home is going to cost more, and your premiums are going to reflect that.
Problems happen in life and leadership matters.
When Florida faced its crisis, the Governor rolled up his sleeves and went to work. Like in his fight against Fauci, the Governor leaned into the problem and made the right decisions with complete indifference to what the establishment class thought about it.
In fact, the Governor put forward ideas this session to further rein in rates, like extending the My Safe Florida Home program and cutting taxes on insurance policies. These other states, however, don’t have a DeSantis. They have a Newsom. They have Manchurian candidates who were developed in the DEI, Woke Labs of America.
When push comes to shove, they’ll change zero policies or just socialize their system, shifting the burden over to taxpayers and exploding the costs of coverage. I hate it for their residents, but once again, Florida is prepared to reap the benefits.
