Florida Senate leaders have proposed a tax strategy to address the rising insurance costs affecting the state's homeowners.
The strategy could result in a 1.75 percent reduction in insurance premium taxes for properties valued at $750,000 or below.
Could you please note that flood insurance policies enacted or renewed after July 1 would be exempt from premium taxes for twelve months under the bill?
The proposals included in Senate bill SB 7074 have generated lively discussions among industry professionals regarding their potential effectiveness and target audience.
Insurance professionals understand the importance of affordability and availability of coverage for their clients.
There are frequent reports (and personal experience) of clients reducing coverage in order to afford some level of insurance.The bill in question, SB 7074 has been crafted to alleviate financial burdens by providing tax cuts and credits to policyholders. The cuts are projected to save $363 million over a two-year period.
However, there is disagreement among Democratic leaders who argue that the measures do not fully address the state's insurance problems and that the bill favours business interests.
Florida's insurance landscape is facing several challenges, such as the highest premiums in the nation averaging $6,000 annually (a 42% increase in 2023 over 2022), extreme weather events, and a highly litigious environment, all contributing to an unstable market.
Despite the addition of six new insurers, the market remains unstable, causing difficulties for many Floridians with coverage costs.
Benjamin Keys, an economist from the Wharton School, shared his worries with Newsweek about the potential impact on the real estate sector if affordable insurance becomes inaccessible, which could have broader economic implications.Tailrow Insurance Company, a subsidiary of HCI Group, was granted approval in April to offer homeowners multi-peril insurance, making it the first company authorised following legislative reforms.
Mainsail Insurance Company, a subsidiary of Spinnaker Insurance Company (owned by Hippo Holdings Inc.), received approval in August to provide a range of insurance products, such as auto and property coverage.
In August, Orion180 and Orion180 Select were approved to write property and casualty policies. They started by offering wind-only products and are now looking into expanding to include a broader homeowners product this year.
Orange Insurance Exchange, with a starting surplus of $25 million and led by former Tower Hill Insurance Group executives, was approved in October and started in December.
Source: insurancebusinessmag.com
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