Moskowitz Reintroduces Bill to Reduce Cost of Homeowners Insurance

In Advance of Hurricane Season, Moskowitz’s legislation will pass savings on to consumers

May 18, 2023

Parkland, FL

PARKLAND, FL – Today, Congressman Jared Moskowitz (D-Florida) released the following statement after he introduced legislation that will lower the cost of homeowners insurance for Floridians.

“Ahead of hurricane season, it’s critical for Floridians to have their homes insured in the event of severe damage. However, with storms becoming stronger and more frequent, insurance companies are seeking higher and higher reinsurance amounts, and those costs unfortunately get passed down to consumers. This legislation is a strong step towards stabilizing the insurance market and, most importantly, lowering rates for homeowners.”

As it currently stands, insurance companies regularly buy “reinsurance,” a reimbursement system insurance companies use to insulate itself from the risk of major claims events. Due to the larger number of disasters and hurricanes in Florida, insurance companies are now forced to purchase higher amounts of reinsurance – the cost of which is then passed down to Floridians. 

Under Moskowitz’s legislation, Floridians will pay less in insurance rates because the legislation guarantees the federal government will issue post-event bonds to insurance companies, so they are no longer at “risk of ruin.” The bonds would fund the difference between the cap set on reinsurance requirements and the sum of homeowner damages caused by the event. In essence, the Federal government will help guarantee part of the insurance cost for homeowners when disaster strikes. 

Highlights of the program created by Moskowitz’s legislation: 

  • It doesn’t cost the Federal Government anything (other than administration costs).
  • It covers a broad range of natural disasters – severe storm, tropical storm, hurricane, earthquake, tsunami, fire, tornado, and hail.
  • States can opt in – the program is voluntary and established by filing a state plan with the Federal Insurance Office.
  • States have access to the lowest possible loan rate and would not have to tax insurers to establish pre-event catastrophe funds.
  • The threshold to trigger the program is set high enough to only apply to truly exceptional natural disasters, not for daily claims.
  • It will protect admitted insurers from ‘Risk of Ruin,’ reduce reinsurance costs (about ½ of premium costs), and allow insurers to insure for the most foreseeable disasters, while having the Federal back stop for truly exceptional disasters. 
  • Thresholds for triggering the program would vary from State to State according to total direct written premiums. 

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