The Florida Senate
BILL ANALYSIS AND FISCAL IMPACT STATEMENT
(This document is based on the provisions contained in the legislation as of the latest date listed below.)
Prepared By: The Professional Staff of the Committee on Rules
BILL: CS/CS/SB 1104
INTRODUCER: Rules Committee; Judiciary Committee; and Senator Bradley
SUBJECT: Policy Cancellations and Nonrenewals by Property Insurers
DATE: February 27, 2024
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Thomas Knudson BI Favorable
2. Bond Cibula JU Fav/CS
3. Thomas Twogood RC Fav/CS
Please see Section IX. for Additional Information:
COMMITTEE SUBSTITUTE - Substantial Changes
I. Summary:
CS/CS/SB 1104 places certain limits on the cancellation or nonrenewal of personal lines
residential property insurance and commercial residential property insurance policies, whether
authorized lines or surplus lines, where the property has suffered a loss related to a hurricane. If a
property was damaged as a result of a hurricane or wind loss that is the subject of the declaration
of emergency and the filing of an order by the Commissioner of Insurance Regulation, the
insurer may not cancel or nonrenew the property insurance policy until 90 days after completion
of repairs. However:
If flood is not a covered peril and the property has been damaged by flood caused by a
hurricane, the insurer may not cancel or nonrenew until the earlier of completion of repairs or
the expiration of one subsequent renewal of the policy, with certain exclusions.
The insurer may cancel or nonrenew on 10 days’ notice for nonpayment of premium or if the
named insured no longer has an insurable interest in the property; or on 45 days’ notice for a
material misstatement, fraud, unreasonable delay by the insured, failure of the insured to
respond to a reasonable written inquiry by the insurer, or if the insurer has paid policy limits.
Any nonrenewal after damage requires at least 90 days’ notice that the policy will be not
renewed and that the nonrenewal must not take effect until at least 90 days after completion
of repairs.
A policy extended by these provisions must have similar terms, but is subject to current premium
rates. The bill defines completion of repairs to mean when restored to the extent the property is
insurable by Citizens Property Insurance Corporation, by another authorized insurer, or eligible
REVISED: BILL: CS/CS/SB 1104 Page 2
surplus lines insurer; or when one of the following licensed professionals inspects and certifies to
completion of repairs: a home inspector, building code inspector, contractor, engineer, or
architect. The restrictions on cancellation and nonrenewal are not applicable to loss that is valued
at less than the applicable deductible.
The bill does not appear to have a significant fiscal impact on state or local government.
The bill provides an effective date of July 1, 2024.
II. Present Situation:
The requirements for an authorized insurer to provide notice of cancellation or nonrenewal of a
policy are set forth in s. 627.4133, F.S. The specific notice depends on the type of insurance
provided and the particular circumstances of the subject policy.
For coverage of property, casualty (except for mortgage guaranty), surety, or marine insurance
(except for certain motor vehicle insurance), an insurer must inform the first-named policyholder
with 45 days’ advance written notice of the cancellation or nonrenewal.
1
When cancellation is
due to failure to pay a premium, at least 10 days’ written notice of cancellation and the reason for
the cancellation must be provided to the insured.
2
When cancellation occurs during the first
60 days and is not a result of nonpayment of premium, at least 20 days’ written notice and the
reason for cancellation must be given to the insured except where there has been a material
misstatement, misrepresentation, or failure to comply with the policy’s underwriting
requirements.
3
After 60 days, no such policy may be cancelled by the insurer unless there has
been a material misstatement, a failure to pay the premium, a failure to comply with the policy’s
underwriting requirements within a specified time, or a substantial change in the risk covered by
the policy or when cancellation is given for a class of insureds.
4
If an insurer fails to provide the
45-day or 20-day written notice, the coverage provided remains in effect until 45 days after the
notice is given or until the effective date of replacement coverage obtained by the named insured,
whichever occurs first.
5
With respect to personal lines or commercial residential property insurance policies, such as any
homeowner, mobile home owner, farm owner, condominium association, condominium unit
owner, or apartment building, the insurer must give the first-named insured written notice at least
120 days before the effective date of the cancellation or nonrenewal.
6
Such insureds must receive
10 days’ advance notice of cancellation for a failure to pay a premium, or 20 days’ notice for a
reason other than nonpayment if cancellation occurs within the first 90 days of coverage.
7
An
insurer may not cancel the policy after it has been in effect for 60 days unless there has been a
material misstatement, nonpayment, a failure to comply with the policy’s underwriting
1
Section 627.4133(1)(a) and (b), F.S.
2
Section 627.4133(1)(b)1., F.S.
3
Section 627.4133(1)(b)2., F.S.
4
Section 627.4133(1)(b), F.S.
5
Section 627.4133(1)(c), F.S.
6
Section 627.4133(2)(b), F.S.
7
Section 627.4133(2)(b)1. and 2., F.S. BILL: CS/CS/SB 1104 Page 3
requirements within a specified time, a substantial change in the risk covered by the policy or
unless the cancellation is for a given class of insureds.
8
An authorized insurer may not cancel or nonrenew a residential property insurance policy:
For a period of 90 days after the property has been repaired, if such property has been
damaged as a result of a hurricane or wind loss that is the subject of the declaration of
emergency and the filing of an order by the Commissioner of Insurance Regulation.
Until the earlier of when property has been repaired or 1 year after the insurer issues the final
claim payment, if such property was damaged by a covered peril, but was not damaged as a
result of a hurricane or wind loss that is the subject of the declaration of emergency and the
filing of an order by the Commissioner of Insurance Regulation.
9
A structure is deemed repaired when substantially completed and restored to the extent that it is
insurable by another authorized insurer.
10
An insurer or agent may cancel or nonrenew such a
policy prior to the repair of the dwelling or residential property upon 10 days’ notice for
nonpayment of premium; or upon 45 days’ notice:
For a material misstatement or fraud related to the claim;
If the insurer determines that the insured has unreasonably caused a delay in the repair of the
dwelling; or
If the insurer has paid policy limits.
11
If the insurer elects to nonrenew a policy covering a property that has been damaged, the insurer
must provide at least 90 days’ notice to the insured that the insurer intends to nonrenew the
policy 90 days after the dwelling or residential property has been repaired.
12
This requirement
does not prevent the insurer from canceling or nonrenewing the policy 90 days after the repairs
are complete for the same reasons the insurer would otherwise have canceled or nonrenewed the
policy but for the limitations.
13
Any cancellation or nonrenewal subject to these limitations that
is set to become effective during a hurricane, the effective date is extended until the end of the
duration of the hurricane.
14
Insurers may not cancel or nonrenew a property insurance policy based on the policyholder
making a claim based on the result of an act of God, unless the insurer can demonstrate that the
insured failed to take action reasonably necessary as requested by the insurer to prevent
recurrence of damage to the insured property.
15
The requirements for a surplus lines insurer to provide notice of cancellation or nonrenewal of a
policy are set forth in s. 626.9201, F.S. Currently, a surplus lines insurer issuing a policy for
property insurance must give the first named insured at least 45 days’ advance written notice as
8
Section 627.4133(2)(b)3., F.S.
9
Section 627.4133(2)(e)1., F.S.
10
Section 627.4133(2)(e)5.a., F.S.
11
Section 627.4133(2)(e)2., F.S.
12
Section 627.4133(2)(e)3., F.S.
13
Id.
14
Section 627.4133(2)(f), F.S.
15
Section 627.4133(3), F.S. BILL: CS/CS/SB 1104 Page 4
to why the policy is not to be renewed.
16
A surplus lines insurer issuing a policy providing
covering property must give the named insured written notice of cancellation or termination,
including the reasons for the cancellation or termination, with certain exceptions.
17
However,
current law contains no specific language regarding cancellation or nonrenewal of surplus lines
policies issued on properties with unrepaired damage.
III. Effect of Proposed Changes:
The bill amends ss. 626.9201 and 627.4133, F.S., to place certain limits on the cancellation or
nonrenewal of personal lines residential property insurance and commercial residential property
insurance policies, whether authorized lines or surplus lines, where the property has suffered a
loss related to a hurricane. If a property was damaged as a result of a hurricane or wind loss that
is the subject of the declaration of emergency and the filing of an order by the Commissioner of
Insurance Regulation, the insurer may not cancel or nonrenew the property insurance policy until
90 days after completion of repairs. However, if flood is not a covered peril and the property has
been damaged by flood caused by a hurricane, the insurer may not cancel or nonrenew until the
earlier of completion of repairs or the expiration of one subsequent renewal of the policy, with
certain exclusions.
If an insurer is required to extend or renew a policy pursuant to this provision, any claim for loss
arising from unrepaired damage as a result of flood caused by a hurricane is not covered under
the extended or renewed policy. When flood is not a covered peril, the requirements under this
provision to extend or renew the policy do not apply if the insurer has no actual knowledge of the
flood damage or if the flood damage, along with the physical evidence of the damage, is not
communicated to the insurer before the expiration of the policy.
The insurer may cancel or nonrenew on 10 days’ notice for nonpayment of premium or if the
named insured no longer has an insurable interest in the property. The insurer may cancel or
nonrenew on 45 days’ notice for a material misstatement or fraud related to a claim,
unreasonable delay by the insured in the repair of the dwelling, failure of the insured to respond
to a reasonable written inquiry by the insurer after the expiration of the declaration of
emergency, or if the insurer has paid policy limits.
If the insurer elects to nonrenew a policy covering a property that has been damaged, the insurer
must provide at least 90 days’ notice to the insured that the insurer intends to nonrenew the
policy 90 days after the property has been repaired. The insurer is not prevented from canceling
or nonrenewing the policy 90 days after the repairs are complete for the same reasons the insurer
would otherwise have canceled or nonrenewed the policy.
The Financial Services Commission is authorized to adopt rules, and the Commissioner of
Insurance Regulation may issue orders, necessary to implement these provisions. The
Commissioner may waive any of the provisions due to solvency concerns or other factors that
could harm policyholders if the provisions of this paragraph were enforced upon the insurer.
16
Section 626.9201(1), F.S.
17
Section 626.9201(2), F.S BILL: CS/CS/SB 1104 Page 5
The bill provides that a structure is deemed to be repaired when it is substantially completed and
restored to the extent that it is insurable by Citizens Property Insurance Corporation, by another
authorized insurer, or by an eligible surplus lines insurer; or when one of the following have
inspected and certified or attested to completion of the repairs:
A licensed home inspector;
18
A certified building code inspector;
19
A licensed general, building, or residential contractor;
20
A licensed professional engineer;
21
or
A licensed professional architect.
22
If an insurance policy is extended or renewed by operation of these provisions, the policy must
contain similar policy terms as the policy being extended or renewed. However, this does not
impact other law on the premium rates that may be charged upon renewal, meaning that the
renewal rate will be the rate authorized by the OIR.
Finally, the bill provides the following regarding interpretation of its changes:
Should there be a conflict, the general statute of limitations at s. 95.11, F.S., controls.
Should there be a conflict, the requirements regarding notice of a property insurance claim at
s. 627.70132, F.S., controls.
These changes do not revise or modify any emergency order issued by OIR prior to the
effective date of the bill, July 1, 2024.
23
The bill provides an effective date of July 1, 2024.
IV. Constitutional Issues:
A. Municipality/County Mandates Restrictions:
None.
B. Public Records/Open Meetings Issues:
None.
C. Trust Funds Restrictions:
None.
18
Section 468.8314, F.S.
19
Section 468.607, F.S.
20
Section 489.111, F.S.
21
Section 471.015, F.S.
22
Section 481.213, F.S.
23
For instance, after Hurricane Idalia struck the Gulf Coast in 2023, affecting 33 counties, the OIR issued an emergency
order limiting cancellation or nonrenewal of property insurance policies. https://floir.com/docs-sf/default-
source/orders/property-and-casualty/2023/emergency-order-for-hurricane-idalia-315284-23-eo.pdf?sfvrsn=99ec3872_2. A
similar order was entered regarding Hurricane Ian in 2022. https://www.floir.com/docs-sf/default-source/floir-
documents/hurricane-ian-emergency-order-with-all-exhibits-09282022-filed.pdf?sfvrsn=fb033799_2. BILL: CS/CS/SB 1104 Page 6
D. State Tax or Fee Increases:
None.
E. Other Constitutional Issues:
None.
V. Fiscal Impact Statement:
A. Tax/Fee Issues:
None.
B. Private Sector Impact:
The bill should benefit residential property owners affected by hurricanes or windstorm
damage by assuring they can maintain insurance coverage while having property damage
repaired. Insurers will be affected by having to extend certain policies.
C. Government Sector Impact:
The bill does not appear to have a significant fiscal impact on state or local government.
The bill gives rulemaking authority to the Financial Services Commission. The
Commission may incur some costs if it does adopt any rules pursuant to this authority.
VI. Technical Deficiencies:
None.
VII. Related Issues:
None.
VIII. Statutes Affected:
This bill substantially amends the following sections of the Florida Statutes: 626.9201 and
627.4133.
IX. Additional Information:
A. Committee Substitute – Statement of Substantial Changes:
(Summarizing differences between the Committee Substitute and the prior version of the bill.)
CS/CS by Rules on February 26, 2024:
The committee substitute:
Applies the renewal and cancellation provisions for flood damage that is not covered
to prohibit cancellation or nonrenewal of a personal lines property insurance policy
until the earlier of when the property has been repaired or the expiration of one BILL: CS/CS/SB 1104 Page 7
subsequent renewal of the policy (rather than the earlier of when the property has
been repaired or 18 months after the date of loss).
Provides that if an insurer is required to extend or renew a policy, any claim arising
from unrepaired damage as a result of flood caused by a hurricane will not be covered
under the extended or renewed policy. When flood is not a covered peril, the
requirements do not apply if the insurer has no actual knowledge of the flood damage
or if the flood damage, along with the physical evidence of the damage, is not
communicated to the insurer before the expiration of the policy.
Provides that an insurer may cancel or nonrenew if:
o The named insured no longer has an insurable interest in the property.
o After the expiration of the declaration of emergency, the insurer has made a
reasonable written inquiry as to the status of the repairs, and the insured fails to
respond within 30 calendar days to provide the information.
Provides that the Insurance Commissioner may waive the provisions due to solvency
concerns or other factors that could harm policyholders.
Adds a provision that a structure is deemed to be repaired when substantially
completed and restored to the extent that it is insurable by Citizens Property
Insurance Corporation or by another authorized insurer or eligible surplus lines
insurer writing policies in this state.
Provides that the restrictions on cancellation and nonrenewal are not applicable to
loss or damage to the insured property that is valued at less than the applicable
deductible for policies issued by an authorized insurer.
If a policy is extended or renewed by an authorized insurer to comply with the bill,
the policy must contain similar policy terms as the policy being extended or renewed
unless the insurer has updated approved forms that will apply to all insureds with the
same endorsement.
CS by Judiciary on February 5, 2024:
The amendment limited the bill to residential property and added that a property is
considered repaired when inspected and certified or attested as completed by one of 5
types of building professionals. The amendment also changed the time in which
nonrenewal unrelated to nonpayment or cause is prohibited from 12 months to 18 months
from the date of loss.
B. Amendments:
None.
This Senate Bill Analysis does not reflect the intent or official position of the bill’s introducer or the Florida Senate.