The rising cost of home insurance faced by many Americans living in coastal areas, or others vulnerable to flooding, has been a major point of concern for some time now, and has in recent months been grabbing headlines nationwide. Now, a controversial bill related to this issue in the state of Florida may be running into opposition from some lawmakers who say it doesn’t benefit residents.
Currently, people in the state of Florida are allowed to to buy their home insurance plans related to flooding in particular to buy that coverage only through the state’s Citizens Property Insurance Corp., but a bill which recently passed the state’s Senate is drawing criticism in the House, according to a report from the Bradenton Herald. SB 1672, as the bill is known, would allow private insurance companies to be more active in providing this type of coverage, largely without regulation, as a means of helping to reduce the state’s own exposure to major losses in the event of a significant weather event, and make the CPI a smaller entity within the state’s infrastructure.
Why the pushback?
Those who oppose the bill, though, say that the way the law is currently written has major flaws, including the fact that it would move many state residents onto the private market, where insurers would not have to obtain state approval to raise rates, the report said. As such, it’s theoretically possible that such companies would be able to offer extremely low rates to entice more consumers before a huge hike later on.
That issue plays into existing concerns among consumer advocacy groups and many lawmakers alike that home insurance policies of this type are already extremely expensive, and any massive increases in them would, in turn, make it extremely difficult for affected homeowners to afford their premiums, the report said. Currently, though, the lower premiums offered by these companies do exist in the market, and nothing prevents consumers from switching to them ahead of any state laws being changed.
â€‹Insurance agents who operate in Florida will certainly have to keep close tabs on the ways in which lawmakers proceed with such a bill, as it might have a major impact on how they do business. And because many other states are weighing similar measures these days, this kind of issue could serve as a belwether for agents in other parts of the country as well.