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In the months leading up to the 2011 session, residential property insurance and motor vehicle insurance appeared poised to become significant legislative issues. Legitimate crises were evolving around both types of insurance and the need for reform was supported by quantifiable evidence, including sinkhole claims that have nearly tripled from 2006 to 2010, and motor vehicle personal injury protection (PIP) claims that have risen 28 percent (and payments over 66 percent) during the same period.

The basis for residential property insurance reform goes back to at least the 2010 legislative session. SB 2044, a comprehensive package of residential property insurance reforms designed to create a healthier private property insurance market, was broadly supported by stakeholders that included the Office of Insurance Regulation (OIR), the Florida Chamber of Commerce, and other parties. Gov. Charlie Crist, however, vetoed the bill. His veto was premised on two principal provisions in the bill—expedited rate filing for property insurers and changes to the application of mitigation discounts. Supporters of the bill roundly condemned Crist’s veto, and the legislature began work on a successor bill for the 2011 session.

Another casualty in 2010 was PIP fraud reform, which did not receive a single hearing in House or Senate committees that year, despite evidence that fraudulent automobile crashes staged to collect PIP benefits were driving up the cost of motor vehicle insurance. Additional compelling evidence began to mount after the 2010 session, indicating that not only was PIP fraud spreading to central Florida, but that it was also costing each policyholder upwards of $100 per year. With that data in hand, supporters began to develop and promote PIP reform legislation for the 2011 session, where they met with minimal success.

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