Florida Legislature passes major changes to auto, property insurance markets

Florida lawmakers passed two bills on the last day of their 2021 legislative session that makes major changes to the state’s auto and property insurance markets. The actions follow weeks of back-and-forth debate on the proposals between the House and Senate chambers.

Stakeholders say neither of the potential new laws will do enough to accomplish lawmakers’ goals of reducing rates or weeding out fraud in their respective insurance industries. Both bills are now headed to Governor Ron DeSantis, who will have to sign them before they can become law.

Senate Bill 76

The bill attempts to address some of the issues plaguing the state’s homeowners insurance market in which insurers lost more than $1.5 billion in last year. It passed Friday in the Senate by a vote of 35 to 5 and 75 to 41 in the House.

The legislation was revised significantly from its original form at the start of the session and includes:

  • Changing the eligibility, rate glide path, and actuarily sound rate indication for Citizens Property Insurance Corp.
  • Replacing the one-way attorney fee-statute to make the recovery of attorney fees and costs contingent on obtaining a judgment for indemnity that exceeds the pre-suit offer made by the insurance company.
  • Reducing the claims deadline on all claims to two years from the date of loss, except for on supplemental claims which will have an additional year.
  • Requiring plaintiffs to file a pre-suit demand at least 10 days before filing a lawsuit against an insurer that includes an estimate of the demand, the attorney fees, and costs demanded, and the amount in dispute; disallows pre-suit notices to be filed before the insurance company to make a determination of coverage; and allows an insurer to require mediation or another form of alternative dispute resolution after receiving notice.

The bill also makes several changes to tackle what insurers claim has been an explosion of roofing claims and litigation. Specifically, SB 76:

  • Makes it illegal for roofing contractors or any person acting on their behalf to make a “prohibited advertisement,” including electronic communication, phone call, or document that solicits a claim.
  • Prohibits the offering of anything of value for performing a roof inspection, an offer to interpret an insurance policy or file a claim, or adjust the claim on the insured’s behalf.
  • Prohibits a contractor from providing repairs for an insured with a contract for repairs that do not include a detailed cost estimate of the labor and materials required to complete the repairs.
  • Adds potential for $10,000 fine for each violation by roofers.
  • Removed from the final legislation was the elimination of the state’s attorney fee multiplier and allowing insurers to include policy language that offers actual cash value instead of the full replacement cost on roofs.

The industry had urged lawmakers to include these provisions to address cost drivers, but it became a sticking point in both chambers. An amendment passed Friday also eliminated offers of judgment for the insured or the insurer.

Senator Jeff Brandes, who co-sponsored the legislation, voted to pass the bill but said it was only a “40% solution for what is needed in Florida to bend the cost curve.”

“Hopefully, it stabilizes rates, but really will ultimately do nothing to actually lower them,” he told his colleagues.

Locke Burt, chairman, and CEO of Florida-based insurance company Security First, said he was disappointed lawmakers didn’t take up reforms to the effects of two Florida Supreme Court cases – Joyce vs. FedNat (2017), and Sebo vs. American Home Assurance (2016) – that are said to be partly to blame for perpetuating litigation in the state, as noted in a recent report from Florida Insurance Commissioner David Altmaier. But, Burt said, the legislation that passed makes some much-needed changes and is a “step in the right direction.”

“I would characterize this a single step,” he told Insurance Journal. “But I would also tell consumers that their rates are going to continue to go up.”

Senator Jim Boyd, who is also an insurance broker, acknowledged that the bill is far from perfect and that no one, including the insurance industry and the trial bar, is happy with the result.

However, he noted, “we have got to do something. We cannot wait until next year to solve what is an incredibly large problem for our constituents.”

Representative Bob Rommel, who worked on the House version of the bill, said the legislation would provide oversight on insurance companies, help attract new carriers to the state of Florida and “make sure homeowners will have a competitive market and have the right to choose the right insurance for themselves.”

The Florida Office of Insurance Regulation (OIR) said in a statement that it “appreciates the tireless work of the Florida Legislature to pass meaningful property insurance reform. SB 76 protects consumer’s rights and addresses the current challenges in the property insurance market.”

If signed by DeSantis, the new law will take effect July 1, 2021.

Senate Bill 54

Florida’s passage of this bill will repeal the state’s no-fault personal injury protection (PIP) system and instead require mandatory bodily injury coverage starting at $25,000 for all drivers in the state of Florida. Earlier versions of the legislation required insurers to offer medical payments coverage (MedPay) in the amount of $5,000 or $10,000, but the passed version makes the offering optional and includes an optional $5,000 MedPay death benefit.

The bill will also create a new framework to govern motor vehicle claims handling and third-party bad faith failure to settle actions against motor vehicle insurance carriers. A House amendment passed this week added a statement that the statute governing these bad faith actions is not intended to expand or diminish any cause of action currently available against insurance agents who sell motor vehicle liability insurance policies in this state.

Brandes, one of three senators to vote against the bill, said its sponsors had not done enough to study how the bill would affect rates.

“Florida already has some of the highest rates in the country and unfortunately if you are just struggling to make it… [and] buying just PIP today, rates will go up 40%,” Brandes said.

But bill sponsor Danny Burgess, a Republican, argued that a 2016 study from OIR showed rates would go down if the state repealed PIP. He said the provisions addressing bad faith will also help stop fraud that has been rampant with PIP and lead to further rate reductions.

“It’s hard to predict market forces, but overwhelmingly the data shows we will see a [rate] reduction,” he said. “Certainly not a steep reduction, but I do believe we will see a reduction.”

However, many in the industry and stakeholders have countered that assessment.

Insurer trade group the American Property Casualty Insurance Association (APCIA) opposed the bill’s passage, saying it could increase rates on Florida drivers and increase the state’s current uninsured rate of 20%.

It worked on an actuarial study to assess the impact of the bill and said its analysis shows it could increase the cost of the average auto insurance policy by as much as 23% or $344. Drivers who carry the lowest levels of coverage could see increases as high as $805 a year.

APCIA said more than 28,000 letters from Floridians were sent to lawmakers opposing the bill. The group is encouraging the governor to veto the legislation.

“As SB 54 heads to Governor DeSantis’ desk, he has the opportunity to protect Florida drivers from higher auto insurance costs and help keep our roads safer by vetoing this legislation,” APCIA said.

Also encouraging the governor to veto the bill are the Personal Insurance Federation of Florida (PIFF) and the Consumer Protection Coalition (CPC).

“We are extremely concerned that this bill would substantially increase rates for our customers and Florida residents who can least afford an increase while forcing hundreds of thousands of Floridians already struggling to pay current premiums to drive without insurance,” said Michael Carlson, president, and CEO of PIFF.

“On behalf of Florida consumers, the CPC urges Governor Ron DeSantis to examine the potential cost impact this legislation will pose on Florida consumers and consider vetoing the bill if it is found to raise rates and not decrease litigation,” the group said.

If signed by DeSantis, the new law will take effect on Jan. 1, 2022.

/by

10 essential insurance plans everyone should have

Did you know that almost 6,000 insurance companies operate in the US? Of these, more than 2,500 are property and casualty insurers. They make up the brunt of the insurance sector, as they’re the ones that sell home and auto insurance. All that should already give you an idea of how varied the insurance sector is. The big question now is, which of these provide essential insurance coverage? We’ve rounded up 10 of the most vital ones that most people shouldn’t go without, so be sure to read on!

Health Insurance. This is one of the types of insurance you should never bypass, even if it’s no longer the law. That’s right: As of January 2019, health insurance, at the federal level, is no longer a requirement in the US.

However, some states, such as California and New Jersey, have state-imposed laws. In these states, health insurance is either mandatory or will become required.

For many good reasons, seeing as a health plan can help ease the burden of medical costs. With health insurance, you can reduce your out-of-pocket spending on health care services. Some comprehensive policies even offer free preventive services, such as check-ups and screenings.

Keep in mind that health care spending in the US may reach a staggering $6 trillion by 2027. That shows how expensive medical care has become, and you can be at risk if you don’t have a health plan. Without a health policy, you may end up facing exorbitant hospital and medical bills.

Not sure where to start when it comes to purchasing health plans? Contact us and you’ll have a better idea of what each plan covers and what they don’t.

Dental Insurance. Most basic types of health insurance offer little to no coverage at all for dental care services. That’s why for every US adult with no health policy, three adults are without dental coverage.

The thing is, poor oral health doesn’t only cause tooth decay and periodontitis. It can also affect the overall health and well-being of individuals. Researchers, for instance, say that gum disease and heart disease may go hand in hand.

Many other studies found links between oral health, strokes, diabetes, and mental illnesses. Others found evidence that poor dental health can result in nutritional deficiencies. Some researchers also say that the state of the mouth is a risk factor for obesity.

As you can see, dental health is just as vital as general health. As such, it’s best to supplement your health policy with a dental plan. This way, you can improve both, which in turn, can help you have a better quality of life.

Motor Vehicle Insurance. There are only two states in the nation that don’t impose the purchase of auto insurance. These two are New Hampshire and Virginia. If you aren’t from these states, it’s your legal responsibility to carry auto insurance.

In fact, even if you’re from the Granite State or the Old Dominion State, you still need “proof of liability.” For instance, if you’re at fault for a car crash in NH, you must prove that you can pay for the damages you caused. Otherwise, you’ll likely end up getting your driving privileges suspended.

In Virginia, you can “skip” auto insurance, but if you do, you need to shell out $500. This is for the “Uninsured Motor Vehicle Fee,” which is only a permit that lets you drive without coverage. It’s not insurance, so, if you end up in a crash, you’re likely to end up paying for the damages too.

Keep in mind that road crashes are so common in the US, and they cause at least 4.4 million serious injuries each year. Overall, these accidents cost the economy and society at least $871 billion per year.

Homeowners’ or Renters’ Insurance. Federal and state laws don’t require these types of insurance plans. However, homes purchased through a mortgage, which 62.9% of homeowners did, often do. It’s one of the most common requirements set forth by most mortgage lenders.

Renters’ insurance isn’t a federal or state law, but landlords can demand it from their tenants. It’s usually a part of a rental agreement that protects the rented-out property. However, it also protects renters, as this policy covers their possessions too.

You should get a policy even if you’re already free from mortgage or if your landlord doesn’t require you. A homeowners’ or renters’ insurance policy can protect you from sudden losses. It can also help you pay for the costs to fix or replace property damaged by accidental causes.

Flood Insurance. The basic types of insurance coverage for homes exclude flood damage coverage. For properties within a high-risk flood zone, flood insurance is often mandatory. These include homes purchased with government backing.

However, you should still get flood insurance even if your home is outside of a high-risk zone. For starters, the frequency of floods in the US has risen by more than 250% since 2000. This means that even low- to moderate-risk homes are at a severe threat of flood damage.

Life Insurance. 70% of Americans believe that life insurance can protect their financial well-being. That makes it one of the essential types of insurance, but only half of the respondents said they own one. Others in this group were also unsure if they had a life insurance plan.

Wherever in the U.S., you may be, no law requires you to purchase this type of insurance. However, it’s your life on the line here, as well as the future of your loved ones. A life insurance policy can protect your family’s finances in case you pass away.

Some types of life insurance policies even let you build a “savings” account as you pay for your premiums. These include permanent life policies, such as universal or whole life insurance plans. These come with a “cash value” component that grows every year.

After some time, say ten years, you may already be able to withdraw or borrow against that savings account. You can then use the money as you see fit while you’re still alive and well.

Workers’ Compensation. Workers’ compensation is mandatory in 49 states. The Lone Star State is the lone state that doesn’t require this coverage in the US.

Workers’ comp, however, is the legal responsibility of employers. They must be the ones to purchase this for their workers. If they don’t, they will face severe penalties from the federal to the local level.

With that said, be sure that your employer has given you workers’ compensation. This policy should cover you for injuries and illnesses that occur while you’re on the job. It should also pay for lost wages in case you can’t go to work due to a job-related health issue.

Disability Insurance. Sixty-one million adults, or 25% of the US adult population, have at least one type of disability. The majority of them have problems with mobility, followed by cognition issues. What’s more, these conditions affect not only older adults but younger people too.

Living with a disability can have a severe impact on one’s ability to work. Moreover, these health conditions cause a massive spike in medical and care costs.

With disability insurance, you can protect yourself and your financial well-being. You also get to safeguard your loved ones who depend on your ability to generate income. It can help you pay for your bills and other expenses if you can’t work due to a disabling injury or illness.

Umbrella Insurance. Umbrella insurance provides coverage for claims that existing policies won’t cover. They are “add-ons” to typical insurance plans that have limitations. The “umbrella” part of your policy pays for whatever these restrictions don’t.

For instance, let’s say your homeowners’ policy has a property coverage limit of $100,000. However, a fire occurred, and your home has sustained damages that cost $150,000 to repair or replace. If you have an umbrella policy, it should cover that remaining $50,000 (or up to the umbrella coverage’s limits).

Home-Based Business Insurance. As of June 2020, about 40% of Americans work full-time from their own houses. Many others run their sole businesses or sidelines from home.

If any of these is true in your case, know that your home insurance may not cover all of your business properties. A few examples are computers, electronics, and equipment you use for your business. Your policy may also not cover injuries to others that occur due to business activities.

To protect yourself from such losses and liabilities, consider getting home-based business coverage.

There you have it, ten of the essential insurance plans that most people would benefit from. There are many others, such as travel insurance, but the ones above should be your priorities. It’s also best to get them as early as now, as the longer you wait, the more expensive they may become.

/by

Ways businesses can prepare for the unknowns of a post-COVID world

Running a business is no small feat. Add to that the evolving uncertainties with COVID-19, protests, rioting, a recession and more, and any business is on high alert. Preparing for unknowns is difficult despite the organization’s size, but it can be even more difficult for small and medium businesses.

Whether you’re running a booming startup with a network of teams, have a small business with a dedicated core of employees or are a solo act making your dream come true, it’s important to be proactive during these challenging times. Here are three steps every business owner should take to ensure they are protected in the future:

Step 1: Have a crisis action plan

What would happen if your store was ransacked during a riot? What would you do if someone broke into your business accounts? What if you or your employee was injured on the job? It’s important to set up at minimum a basic crisis plan to deal with scenarios that could cause trauma to people and stress to your bottom line.

Crisis plans are written procedures that serve as guidelines to follow when an incident occurs. They can include training information that’s helpful to prepare for different situations. This also should include important contact information such as police and emergency numbers as well as insurance contact information.

Step 2: Secure the right insurance

Many businesses struggle to get adequate coverage, especially liability coverage for unique situations. Consider contacting Island Insurance Specialists, which provides insurance that other providers can’t or won’t.

From tow companies to amusement rental organizations to stunt performers and so much more, you’ll get the coverage you need for any risk. This can include considerations for crisis situations as well, such as communicable disease liability coverage (including COVID-19), civil commotion liability coverage (such as riots and looting), active shooter liability coverage, and more. Learn more by calling us at 727-754-5036 or use our contact form.

Step 3: Expect the unexpected

If nothing else, 2020 has been the year to expect the unexpected. It’s important that you be prepared for anything. In addition to being proactive with a crisis plan and ample insurance, you want to set money aside in an emergency fund should your business need to access it.

Whether it’s suddenly having to integrate PPE into your business procedures, adding layers of security to your digital platforms or having the funds to cover payroll if you need to suddenly halt production, having the resources to make it through a rainy day is essential, especially for small businesses that run tighter budgets and schedules.

Being a business owner is a source of pride for many people. By taking these three steps, you’ll ensure the wellness of the business and help it thrive for years to come.

/by

Next COVID-19 challenge: reduce employer Rx costs, enhance patient access

In the coming weeks and months, America will begin attempting to re-start the economy and hopefully take steps toward a semblance of a new normal. However, even as this process gets underway, our economy has been shaken to its core with ramifications that will reverberate for some time to come. In this new reality, America’s employers and health plan sponsors will face daunting challenges as a result of COVID-19’s impact.

That’s what makes the mission of pharmacy benefit managers (PBMs) all that much more important. PBMs are hired by employers and health plans to reduce costs and enhance access to prescription drugs, while helping to keep a lid on health-care premiums. Accomplishing these goals and continuing to find ways to help patients obtain their medications, while staying safe during the COVID-19 pandemic, are essential.

The coronavirus outbreak is first and foremost a human tragedy, affecting millions of people. It is also having a substantial impact on the global economy that has caused an explosion of unemployed Americans, many of whom rely on employer-sponsored health-care coverage. The safety-net programs, such as Medicaid and the Exchanges, will be more important than ever in providing needed coverage options for patients.

As an example of PBMs’ response to the growing number of uninsured as a result of COVID-19, there is a new program that will cap costs for a 30-day supply of generic medications at $25 and at $75 for more than 40 brand-name drugs for the rest of the year for medications, including insulin, contraceptives and products for heart disease and migraines.

Insurance plan sponsors – employers, self-insured plans, and others – for decades have relied on PBMs to manage prescription drug costs in a way that provides affordable access for the patient populations that they represent. PBMs have delivered on that need by achieving an overall low-cost trend by encouraging competition among drug manufacturers and drugstores.

In fact, recent research shows that PBMs will provide savings of more than $512 billion over the next decade for employer- and union-sponsored health plans and their workers and dependents. For 2020, it is estimated that an average per-person PBM savings on prescription drugs is $962.

Now, and in the future, reducing prescription drug costs will affect the overall economy and have implications beyond health care. Every dollar spent on health benefits is a dollar employers can’t spend to create new jobs, increase wages, or invest in innovation.

PBMs continue to implement patient-friendly tools in pharmacy benefits that lower prescription drug costs and improve quality, including negotiating discounts with drugstores to reduce copays and other out-of-pockets costs, negotiating price concessions from drug manufacturers, and promoting more affordable brand and generic drugs.

Drug manufacturers should be lauded for undertaking an unprecedented effort to find vaccines and treatments for COVID-19. But those treatments, once approved, must be made widely available and affordable for everyone, and just as importantly, medications for chronic illnesses must remain accessible for patients. PBMs’ proven track record keeping drug costs in check and providing patients access to treatments will be crucially important to achieving that objective.

As the economy re-emerges from this difficult time, Winston Churchill’s words are apt: “Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.”

During this uncertain time and beyond, patients and plan sponsors can count on PBMs to use their expertise and their negotiating power to provide affordable access to prescription drugs.

/by