Florida’s proposed budget for 2024 year targets insurance crisis

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Florida’s proposed 2024–2025 fiscal year budget includes more than $500 million earmarked for relief measures for Florida homeowners grappling with rising home insurance costs.

The budget includes tax exemptions aimed at lowering insurance costs, funds for the state’s grant program to help owners fortify homes against weather damage, and allocations to improve the Department of Insurance’s ability to analyze data, monitor the industry, and identify further ways to help lower consumer costs.

“Gov. [Ron] DeSantis’ budget recommendations demonstrate an ongoing commitment to Florida’s policyholders by providing the Florida Office of Insurance Regulation (OIR) with the necessary resources to regulate one of the most complex insurance markets in the world,” Insurance Commissioner Michael Yaworsky said in a statement following the budget introduction.

Budget plan details

The $114.4 billion budget takes aim at the state’s homeowners insurance crisis with:

  • $409 million to fund a one-year exemption on policyholders’ taxes, fees, and assessments.
  • $22 million to create a permanent insurance premium tax exemption for flood insurance policies. More than 1.7 million Florida homes participate in the National Flood Insurance Program, according to NFIP data.
  • $107 million for the My Safe Florida Home grant program, which will make the program permanent. The funds are recurring.
  • $1.1 million to improve the OIR’s data analytics and interoperability technology.
  • $475,000 to hire an expert contractor in reinsurance who will analyze the effect of reinsurance on property insurance rates in the state.
  • $200,000 to identify mitigation measures that could help secure discounts for property owners on their home insurance premiums.

Florida’s home insurance crisis

The Sunshine State has the most expensive home insurance costs in the country, averaging $7,788 per year, according to Insurify data. By comparison, the national average cost of homeowners insurance is about $1,784 in 2023.

In 2023, 16 companies either stopped writing new home insurance policies in Florida or reduced the number of policies they’ll write there. Seven have been liquidated since January 2022, and 12 companies are currently in receivership. Insurers have dropped or non-renewed about 400,000 policies in Florida in the past year.

The insurance crisis has swelled the roles of homeowners seeking coverage under Florida’s insurer of last resort — Citizens Property Insurance. The state-created insurer currently covers more than 1.4 million properties in Florida and has become the state’s largest provider of home coverage.

But the state has also approved several new insurers to begin operating in the state.

“Recent reforms have been enacted to stabilize Florida’s property insurance market, making it an attractive and competitive market for new entrants,” said Betsy Stella, vice president of carrier management and operations for Insurify.

The proposed budget “will ensure OIR can remain focused on protecting consumers and fostering an insurance market where insurance products are reliable, available, and affordable for Floridians,” Yaworsky said.

What’s next?

DeSantis’ proposed budget will now go to the legislature for review. The legislative session will begin Jan. 9, 2024.

It’s common for legislators to make changes to proposed budgets before voting to approve a General Appropriations Act. The GAA will then go to DeSantis’ desk for signature or veto.

Should the governor veto any part of the bill, the legislature would need a two-thirds majority to overturn the veto.

This article originally appeared on Insurify and was syndicated by MediaFeed.

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