This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives.
STORAGE NAME: h0625a.IBS
DATE: 1/19/2024
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/HB 625 Property Insurance Coverage
SPONSOR(S): Insurance & Banking Subcommittee, Buchanan
TIED BILLS: IDEN./SIM. BILLS:
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Insurance & Banking Subcommittee 16 Y, 0 N, As CS Fortenberry Lloyd
2) Commerce Committee
SUMMARY ANALYSIS
Citizens Property Insurance Corporation (Citizens): Citizens is Florida’s property insurer of last resort.
Citizens currently writes multiperil and wind-only policies within its three accounts, subject to applicants
meeting eligibility criteria. However, Citizens is prohibited from issuing wind-only policies to commercial lines
residential condominiums when 50 percent or more of the units in the condominium are rented more than eight
times per calendar year for less than 30 days in each rental period (short-term rentals).
The bill allows eligibility for condominiums that are currently ineligible for wind-only coverage due to short-term
rental status. They become eligible for wind-only policies at an actuarially sound and noncompetitive rate that
is not subject to the glide path generally applied to Citizens’ rates.
Roof Inspections: Insurers may not refuse to issue or refuse to renew a homeowners’ policy insuring a
residential structure with a roof that is less than 15 years old solely because of the age of the roof. For a roof
that is at least 15 years old, an insurer must allow a homeowner to have a roof inspection performed by an
authorized inspector at the homeowners’ expense before requiring a homeowner to replace a roof as a
condition of issuing or renewing a homeowners’ insurance policy. Additionally, if an inspection of the roof
performed by an authorized inspector shows that the roof has at least 5 years of useful life remaining, the
insurer may not refuse to issue or renew a homeowners’ policy solely because of roof age. Current law does
not require that authorized inspectors use a particular form to complete the roof inspection or include standards
for the inspections of commercial roofs for insurance purposes.
The bill requires that authorized inspectors conducting roof inspections to determine the remaining useful life
on a residential and commercial roofs use specific forms. An authorized inspector may also provide an
appendix to this form which includes pictures or other documentation to demonstrate the remaining useful life
of the roof.
Loss Assessment Coverage: Loss assessment coverage is insurance coverage for condominium unit
owners that provides protection for situations where the owner of a condominium unit, as the owner of shared
property, is held financially responsible for certain occurrences. Florida law requires that property insurance
policies held by condominium unit owners include a minimum property loss assessment coverage of $2,000 for
all assessments made because of the same direct loss to the condominium property.
The bill provides that property insurance policies issued to residential condominium unit owners on or after July
1, 2024, must contain at least $5,000 in property loss assessment coverage.
The bill has no impact on local or state government revenues or expenditures. It has an indeterminate positive
and negative direct economic impact on the private sector.
The bill is effective on July 1, 2024. STORAGE NAME: h0625a.IBS PAGE: 2
DATE: 1/19/2024
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Citizens Property Insurance Corporation (Citizens)
Background
Citizens Property Insurance Corporation (Citizens) is a state-created, not-for-profit, tax-exempt
governmental entity whose public purpose is to provide property insurance coverage to those unable to
find affordable coverage in the voluntary admitted market.
1
Citizens is not a private insurance
company.
2
It is commonly known as Florida’s insurer of last-resort since eligibility is partly determined
on the risk not being able to be placed in the voluntary, admitted market at an affordable rate. Citizens
offers property insurance through three different accounts: a personal lines account, a commercial lines
account, and a coastal account.
The policies that Citizens writes within these three accounts include the following:
Standard Personal Lines Policies – comprehensive multiperil policies providing full coverage of
residential property equivalent to the coverage provided in the private insurance market;
Basic Personal Lines Policies – similar to dwelling fire policies that provide coverage meeting
the requirements of the secondary mortgage market, but are more limited in coverage than
under a standard policy;
Commercial Lines Residential and Nonresidential Policies – generally similar to the basic perils
of full coverage obtainable for commercial residential structures and commercial nonresidential
structures in the private market;
Personal Lines and Commercial Lines Residential Property Insurance Policies – cover the peril
of wind only;
Commercial Lines Nonresidential Property Insurance Policies – cover the peril of wind only.
3
Citizens’ eligibility criteria sometimes allow it to issue policies that cover wind losses only (wind-only
policies) when it is unable to issue a multiperil policy. However, under current law, Citizens is prohibited
from issuing wind-only policies to commercial lines residential condominiums when 50 percent or more
of the units in the condominium are rented more than eight times per calendar year for less than 30
days in each rental period.
4
Condominium owners have complained that due to this prohibition they are
unable to obtain coverage from any insurers other than surplus lines insurers, which is typically more
expensive than coverage from admitted insurers or Citizens.
5
Effect of the Bill
The bill eliminates the prohibition on Citizens’ eligibility for condominiums that are currently ineligible for
wind-only coverage due to short-term rental status. These condominiums become eligible for wind-only
policies from Citizens at a rate that is actuarially sound and noncompetitive, and not subject to the glide
path generally applied to Citizens’ rates.
6
1
The term “admitted market” means insurance companies licensed to transact insurance in Florida.
2
S. 627.351(6)(a)1., F.S.
3
S. 627.351(6)(c)1., F.S.
4
These types of rentals are commonly referred to as short-term rentals.
5
See s. 626.913, F.S. Surplus lines rates must be noncompetitive with those of admitted insurers. S. 626.916, F.S.
6
In 2010, the Legislature established a “glidepath” to impose annual rate increases up to a level that is actuarially sound.
Under the original established glidepath, Citizens had to implement an annual rate increase which, except for sinkhole
coverage, does not exceed 10 percent above the previous year for any individual policyholder, adjusted for coverage
changes and surcharges. In 2021, the Legislature revised this glidepath to increase it one percent per year to 15 percent,
as follows: 11 percent for 2022; 12 percent for 2023; 13 percent for 2024; 14 percent for 2025; 15 percent for 2026 and all
subsequent years. S. 627.351(6)n5., F.S. STORAGE NAME: h0625a.IBS PAGE: 3
DATE: 1/19/2024
Roof Inspections
Background
Homeowners increasingly complained about insurers’ refusal to write or renew their policies based
upon the age of the roofs on their homes, even when inspections showed that the roofs had useful life
remaining.
7
Homeowners also indicated that insurers refused to issue or renew policies unless they
replaced roofs that are more than a certain number of years old. As a result, the Legislature
implemented statutory prohibitions on property insurers canceling or nonrenewing policies solely based
upon the age and condition of roofs.
8
Insurers may not refuse to issue or refuse to renew a homeowners’ policy insuring a residential
structure with a roof that is less than 15 years old solely because of the age of the roof.
9
For a roof that
is at least 15 years old, an insurer must allow a homeowner to have a roof inspection performed by an
authorized inspector at the homeowners’ expense before requiring a homeowner to replace a roof as a
condition of issuing or renewing a homeowners’ insurance policy.
10
Additionally, if an inspection of the
roof performed by an authorized inspector shows that the roof has at least 5 years of useful life
remaining, the insurer may not refuse to issue or renew a homeowners’ policy solely because of roof
age.
11
The age of the roof is determined using either:
The last date for which 100 percent of the roof’s surface was built or replaced in compliance
with the building code in effect at the time, or
The initial date of a partial roof replacement when subsequent partial builds or replacements
were completed that resulted in 100 percent of the roof’s surface being built or replaced.
12
At present, the law does not require that authorized inspectors use a particular form to complete the
roof inspection. Additionally, the Florida Insurance Code does not contain any standards regarding the
inspection of the roof of a commercial structure.
Effect of the Bill
The bill requires that authorized inspectors conducting roof inspections to determine the remaining
useful life on roofs must use the following forms issued by Citizens and approved by OIR:
Personal Roof Condition Inspection Form for the inspection of residential roofs.
Commercial Roof Condition Inspection Form for the inspection of commercial roofs.
The bill also allows an authorized inspector to provide an appendix, which includes pictures or other
documentation to demonstrate the remaining useful life of the roof.
7
See e.g., Lawrence Mower, Progressive Stops Renewing Some Home Policies in Florida as Lawmakers Target Roof
Claims, Tampa Bay Times (Feb. 8, 2022), https://www.tampabay.com/news/florida-politics/2022/02/08/progressive-stops-
renewing-some-home-policies-in-florida-as-lawmakers-target-roof-claims/ (last visited Jan. 13, 2024).
8
Ch. 2022-268, Laws of Fla.
9
S. 627.7011(5), F.S.
10
Id.
11
Id.
12
Id. STORAGE NAME: h0625a.IBS PAGE: 4
DATE: 1/19/2024
Loss Assessment Coverage
Background
Loss assessment coverage is insurance coverage for condominium unit owners that provides
protection for situations where the owner of a condominium unit, as the owner of shared property, is
held financially responsible for:
Deductibles owed when a claim is made under a condominium association’s property insurance
policy;
Damage that occurs to the condominium building or the common areas of a condominium
property; or
Injuries that occur in the common areas of a condominium property.
13
Florida law requires that property insurance policies held by condominium unit owners include a
minimum property loss assessment coverage of $2,000 for all assessments made because of the same
direct loss to the condominium property.
14
The law further establishes that the maximum amount of any
unit owner’s coverage that can be assessed for any loss is an amount equal to the unit owner’s loss
assessment coverage limit in effect one day before the date of an occurrence that gave rise to the
loss.
15
This coverage is applicable to any loss assessment regardless of the date of assessment by a
condominium association.
16
Effect of the Bill
The bill provides that property insurance policies issued to residential condominium unit owners on or
after July 1, 2024, must contain at least $5,000 in property loss assessment coverage.
B. SECTION DIRECTORY:
Section 1. Amends s. 627.351, F.S., relating to insurance risk apportionment plans.
Section 2. Amends s. 627.7011, F.S., relating to homeowners’ policies; offer of replacement cost
coverage and law and ordinance coverage.
Section 3. Creates s. 627.70143, F.S., relating to commercial roof inspections.
Section 4. Amends s. 627.714, F.S., relating to residential condominium unit owner coverage; loss
assessment coverage required.
Section 5. Provides an effective date of July 1, 2024.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
13
The Balance, Loss Assessment Explained for Condo Insurance, https://www.thebalance.com/loss-assessment-
explained-for-condo-insurance-4060435 (last visited Jan. 13, 2024).
14
S. 627.714(1), F.S.
15
S. 627.714(2), F.S.
16
Id. STORAGE NAME: h0625a.IBS PAGE: 5
DATE: 1/19/2024
2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
The bill will have a positive direct economic impact on condominium owners. Current owners of
condominiums that are ineligible for coverage from Citizens because of short-term rentals, and are
likely obtaining more expensive insurance from the surplus lines market, will be able to obtain coverage
from Citizens. Additionally, condominium owners will receive the benefit of an increase in the loss
assessment coverage provided by their property insurance policies if their policies do not already
contain $5,000 in loss assessment coverage. However, this increase in coverage may result in an
indeterminate increase in premiums.
D. FISCAL COMMENTS:
None.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not Applicable. The bill does not appear to affect county or municipal governments.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
The bill neither authorizes nor requires administrative rulemaking.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
On January 18, 2024, the Insurance & Banking Subcommittee considered the bill, adopted one
amendment, and reported the bill favorably as a committee substitute. The amendment made the
following changes to the bill:
Established that rates charged by Citizens Property Insurance Corporation (Citizens) for wind-
only policies issued to condominiums that are primarily used as short-term rentals are not
subject to the rate glide path generally applied to Citizens’ policies. STORAGE NAME: h0625a.IBS PAGE: 6
DATE: 1/19/2024
Required the use of specified roof condition inspection forms issued by Citizens and approved
by the Office of Insurance Regulation.
The analysis is drafted to the committee substitute as passed by the Insurance & Banking
Subcommittee.