Florida’s long-simmering property insurance crisis is reaching a boiling point ahead of a closely watched gubernatorial race that could test the mettle of Gov. Ron DeSantis, the Republican with presidential aspirations.
DeSantis is the frontrunner in Florida’s gubernatorial race, but in recent weeks has faced attacks from Democratic challengers, who have sought to persuade primary voters that the incumbent is responsible for the state’s failing property insurance market.
Rep. Charlie Crist is set to face Commissioner of Agriculture Nikki Fried in the Democratic gubernatorial primary on Aug. 23 and both have seized on the issue.
“Florida is facing a property insurance crisis and Governor DeSantis has ignored it,” Crist said in an email. “Florida deserves a governor who actually gives a damn and will work to fix problems, not flame culture wars.”
DeSantis is considered a potential presidential candidate in 2024, having built a national profile by flouting national COVID-19 recommendations and championing conservative causes.
Crist, the state’s Republican governor from 2007 to 2011 before switching parties, doubled down at a press conference last week, calling DeSantis “the worst governor in Florida history on property insurance.”
DeSantis, meanwhile, has touted his role in passing legislation in a May special session that he dubbed the “most significant reforms to the Florida property insurance market in a generation.”
Crist’s accusations come after more than a dozen property insurers have left Florida since the start of the year amid rampant litigation, fraud and surging reinsurance rates. More departures could soon follow, pushing Floridians to Citizens Property Insurance Corp., the state’s insurer of last resort. Citizens will soon eclipse 1 million policies for the first time since 2014; it had fewer than 420,000 in October 2019.
Tumult in the market has driven up average premiums by 55 percent in the last three years, according to Insurify, an online insurance marketplace, and made property insurance a flashpoint as hurricane season and election season converge.
DeSantis and his Republican allies in the state legislature have been too consumed with national culture war issues and ignored problems closer to home, Fried told CQ Roll Call. Their failure to pass legislation on property insurance during the general session, which ended in March, forced DeSantis to call a May special session that was an added public expense, Fried noted.
Earlier this year, Florida enacted the controversial Parental Rights in Education bill dubbed by some as the “Don’t Say Gay Bill,” which prevents instruction or discussion of gender identity or sexual orientation in kindergarten through third-grade classrooms. DeSantis also signed a bill that prohibits workplace training or school instruction that teaches that individuals are “inherently racist, sexist, or oppressive, whether consciously or unconsciously.”
“They spent the majority of this legislative session going after the gay community, the Black community and women’s rights instead focusing on the actual issues that were happening on the ground,” Fried said.
DeSantis’ campaign deflected the criticism back at Crist, focusing on his insurance record as governor.
“Charlie’s attacks are ironic coming from the man who single-handedly booted property insurance companies out of Florida with his anti-free market policy experiment in 2007,” DeSantis campaign spokesperson Lindsey Curnutte said via email. “Governor DeSantis is taking on the tough fight to help Florida homeowners and working to clean up the mess Charlie’s policies created.”
Fried and DeSantis agree on little, but she similarly pinned Florida’s failing property insurance market on Crist.
Crist, who consistently leads Fried in polls, took office in 2007 after back-to-back devastating hurricane seasons in 2004 and 2005. Premiums were going up, as was Citizens’ policy count, forcing the nonprofit to take the unprecedented step of levying surcharges on its policyholders to pay claims.
Crist called a special session and ushered in consumer-friendly legislation that prevented private insurance companies from dropping policyholders during hurricane season and capped Citizens’ annual rate increases, among other measures.
Critics — DeSantis and Fried among them — contend the legislation hurt insurers, precipitated a deluge of Citizens’ policies, and further destabilized the market. Citizens hit an all-time high of just under 1.5 million policies at the end of Crist’s gubernatorial term.
“It absolutely crushed the market,” Fried said. “It was just a matter of time before people’s premiums went back up because there was no competition. It might have been a short-term success, but long-term it’s part of the reason why we are in the state that we’re in today — because of the actions he took when he was governor.”
Crist, meanwhile, has boasted on the campaign trail that he lowered premiums 10 percent as governor and maintains the legislation established Citizens as a viable alternative to private insurers that were gouging policyholders to recoup losses from recent storms.
Steve Geller, a former state senator who co-authored Crist’s 2007 reform package, called the allegations from DeSantis and Fried “ludicrous,” noting that nearly all of Crist’s changes were rescinded by subsequent administrations.
“The Republicans largely abandoned that legislation about nine or 10 years ago,” Geller, who is currently a Broward County, Fla. commissioner, said. “To make any suggestion whatsoever that the crisis that we’re facing today is related to actions that Charlie took 15 years ago… that is ridiculous.”
A new plan
Whoever is to blame, Florida finds itself engulfed in an ongoing property insurance crisis.
The state learned in late July that as many as 17 property insurers could lose their credit ratings, potentially jeopardizing their ability to operate in Florida.
Florida Insurance Regulator David Altmaier last week announced a stopgap measure that involves Citizens providing reinsurance to private companies in some instances, but more comprehensive regulatory and legislative changes will likely be needed.
Crist in May unveiled a seven-point plan aimed at the cost of reinsurance, which the state says is up 54 percent since 2019.
A major facet of that plan is Crist’s Fueling Affordable Insurance for Homeowners Act (HR 7643), which would allow the federal government to offer loans to participating states for catastrophic losses. States would pay back the loans over 10 years under the bill, which has seen no action.
Crist’s plan would also end the 25 percent surcharge policyholders pay to the Florida Hurricane Catastrophe Fund, which acts as a reinsurer in the event of a large storm, and lower the fund’s attachment point, the threshold that triggers catastrophic coverage, from $8.2 billion to $4.5 billion.
Fried, too, has laid out a set of property insurance priorities that, in some ways, mirror Crist’s.
Both pledge to assemble a task force to investigate fraud and encourage large carriers already operating in Florida to expand their footprint by bundling property insurance with other lines. They also want to make discounts available to policyholders who participate in certain inspections and make their homes better able to withstand storms.
Both candidates also say personnel changes are needed to protect consumers. Fried would expand the authority of the Insurance Consumer Advocate. Crist, who has called for Altmaier’s replacement, would make the regulatory position an appointee of the governor, rather than an elected office.
The legislation signed by DeSantis in the spring will provide $2 billion in reinsurance relief for insurers, establish a grant fund for hurricane retrofitting of homes and expand coverage eligibility for roof replacements.
“Gov. DeSantis believes that the bills passed during the special session enacted changes to our market which will bring more private insurance companies to Florida, helping to drive down premiums and increase choices for consumers,” said Christina Pushaw, press secretary to the governor.
Reaction to the recent changes has been mixed.
State Sen. Jeff Brandes, a Pinellas County Republican and among the most vocal advocates for a property insurance overhaul, said the package was “too little, too late.”
Michael Peltier, Citizens’ media relations manager, said the legislation is a step in the right direction, but fails to address some of the most entrenched problems in the market, like rampant fraud and litigation.
“It’s probably going to be some time for these laws to take effect and work their way through the system,” Peltier said. “It may be 18 months or so before we see any sort of reliable information on whether these changes have had a positive effect.”
Time, however, is not on DeSantis’ side with about three months to go until the November election.
DeSantis has indicated that more action on the property insurance market is still to come, but hasn’t said what it might look like.
At a July press conference, DeSantis said, “We did more than anyone’s done in May, but we didn’t do 100 percent, so we are all going to do more.”
“So stay tuned,” he added.