Two special sessions of the Florida Legislature in 2022 confronted the state’s crumbling property insurance industry with reforms that targeted litigation and attorney fees, as well as hundreds of millions in funding to help companies on the verge of collapse.
None of the actions by legislators resulted in direct decreases in premiums for policyholders throughout the state and the Florida Keys, but an upcoming 60-day session in Tallahassee beginning March 7 brings another opportunity. Mel Montagne, president of Fair Insurance Rates of Monroe (FIRM), is already advocating for several fixes to provide some relief to local windstorm policyholders — one being a carveout for Monroe County related to Citizens’ premium rate increase schedule. FIRM was created to ensure fair insurance rates for the Florida Keys and bring insurance inequities to the attention of state officials, and Montagne said there are several.
More than 18,000 wind policies in Monroe County are through the state-backed Citizens Property Insurance Corporation. Considered an insurer of last resort, Citizens provides insurance to property owners who are in good faith and can’t obtain coverage through the private market. Citizens is funded by policyholder premiums, which continue to increase by the year. A property insurance market remained volatile in 2022, as a number of insurance companies went insolvent. That left policyholders scrambling to find coverage elsewhere, and many were left with no choice but to go with Citizens.
Policies through Citizens are well over 1 million, up from 474,000 policies insured through Citizens in June 2020. Growing numbers of policies and premium increases, from 11% in 2022 to 15% in 2026, are causing concerns for local policyholders and FIRM.
Added to the list of concerns was legislation passed in a December special session that aims to move policyholders off Citizens if a private insurer offers them a premium that’s within 20% of their Citizens premium. Montagne said it was a slap to the face of Monroe County.
“The genesis of Citizens goes back 51 years to Florida Windstorm Underwriting Association; it was created as a vehicle to insure property for windstorm in Monroe County because insurance companies as far back as 51 years didn’t want to insure that peril,” he said. “To tell us today that, ‘yeah we’re going to impose all of these things’ to deflect folks to go Citizens, we don’t have a choice.”
Montagne refers to the lack of private insurance carriers providing service in Monroe County, which is why a majority of property owners have Citizens. Residential and commercial wind insurance rates in Monroe County are the highest throughout Florida and 175% higher than the median coastal rate. Montagne said Monroe County has some of the most rigorous building standards in Florida, yet Citizens’ rate calculations don’t reflect that.
“Monroe County is unique in its building code and in the way people mitigate their homes for protection against hurricanes,” Montagne said. “A lot of that, in our opinion, is not taken into account on these models that generate base rates for insurance rates.”
During the 2021 legislative session, lawmakers upped the annual cap for Citizens premiums for the ensuing five years. Montagne said FIRM is seeking a carveout in the law that exempts Monroe County from rate increases to 15% by 2026.
Montagne said FIRM is also asking legislators to provide a carveout as it relates to a new flood insurance requirement for Citizens policyholders. Homeowners with a mortgage already have flood insurance since it’s required, unless they are located in an X flood zone. But properties affected include condos, homes elevated above base flood elevation and non-mortgaged properties. Montagne said forcing property owners to carry insurance that they don’t need is unreasonable and burdensome. And it could result in Monroe County residents dropping their windstorm coverage with Citizens if they don’t have a mortgage.
Montagne said he had the chance to meet with state Rep. Jim Mooney and state Sen. Ana Maria Rodriguez to discuss FIRM’s initiatives, of which they both expressed support.
“The problem is getting other legislators on board to help us in our plight,” Montagne said.
Montagne is hopeful legislators review provisions within current statute that provide such carve outs for counties, so long as they’re an area of critical state concern and don’t have a competitive property insurance market.
“We feel quite strongly with those two provisions,” he said. “We should get a carveout for Monroe County for flood insurance requirements and the continued pummeling we receive with rate increases.”
A seat at the table is equally important to the changes FIRM is seeking this legislative session. According to Montagne, Monroe County no longer has a representative on the state’s Citizens Board of Governors. Upper Keys resident Bette Brown began serving on the board following her appointment by former Gov. Rick Scott in 2014. She served some seven years until 2021.
Brown told the Keys Weekly she was appointed twice by Scott before current Gov. Ron DeSantis tapped someone else for the board. Brown said she would have continued if she was selected for another term. During her time on the board, Brown said Citizens insurance was aware of the issues facing Monroe County. They even conducted a $400,000 study to determine whether hardening of structures would help insurance rates in the Keys.
“There were a lot of discussions about Monroe County,” Brown said.
The study didn’t come back with any major results in terms of changes to rates, but Brown said former Citizens CEO Barry Gilway’s push to address one-way attorney fees and assignment of benefits will help the industry and its policyholders.
Monroe County hasn’t seen a representative at the nine-person table since Brown’s departure. Currently, St. Johns County has two representatives on the Citizens board despite only having 4,800 Citizens policies. There’s also a representative from Nassau County with 1,400 policies. The chairman of the board, Carlos Beruff, is a resident of Manatee County with roughly 15,000 policies. Board members are appointed by the governor, Senate president, House speaker or chief financial officer.
“There are five people coming up in 2023 where their terms are up, and we need a seat on that board,” Montagne said. “We’re going to push real hard to get our seat.”
