![]() ![]() “The homeowner’s insurance crisis is a regulatory failure. Insurance companies have been allowed to plunder profits from the state in the form of excessive payouts to executives and sister companies and by shortchanging policyholders,” said Stephen Cain, president elect of the trade group representing Florida trial lawyers. Trial lawyers dispute that frivolous or fraudulent lawsuits are the cause of the problem, blaming lack of proper regulation on the insurance industry by the state. But wind damage to homes and roofs are covered under homeowners’ insurance policies. Much of the damage caused by hurricanes comes in the form of flood damage, which is covered not by private insurers but by the National Flood Insurance Program, a federal agency. ![]() Hurricane Ian last fall caused $114 billion in inflation adjusted damage, according to NOAA, making it the most expensive storm to ever hit the state, and the third most expensive in US history after 2005’s Katrina and 2017’s Harvey.īut for the most part Florida has gotten off fairly easy in recent years, with no hurricanes making landfall in the state from 2019 through 2021. The Atlantic hurricane season is projected to be about normal this year, according to the National Oceanic and Atmospheric Administration, with a 30% chance of an above normal season, and a 30% chance of fewer hurricanes than normal. It’s still a mess.”įlorida’s location and low elevation makes It particularly susceptible to hurricane damage. ![]() “That volume of lawsuits will drive more of these regional companies out of business. “That will muddy the marketplace for years to come,” said Friedlander. The insurance industry pushed for and won a number of reforms meant to curb what it saw as abuse, but so far it hasn’t changed the outlook for insurers, partly because of a flood of nearly 300,000 lawsuits the III said was filed just before the law took effect. “This is a man-made crisis,” said Mark Friedlander, spokesperson for the Insurance Information Institute, who is based in Florida. The insurance industry insists that the state’s risk from hurricanes is only part of the problem, and points to a legal system it says promoted litigation abuse and excess claims. Homeowners in the state pay private insurers about $6,000 a year, compared to a national average of $1,700. And to try to stay solvent, the remaining insurers are charging rates nearly four times as high as the national average. Six were forced to liquidate last year, another one earlier this year. Just more than half of insurers based in Florida are on the state insurance regulator’s watch list due to their financial health. Meanwhile, the regional and local insurers left to provide coverage are in bad shape. No other major insurer has as much as 2%. But in Florida, State Farm has about 7% of the market, according to the Insurance Information Institute, an industry trade group. Big insurance companies dominate more than half the market in the rest of the country. National insurers have very little presence in Florida. But no matter how many storms hit Florida this year, the state’s residents are already struggling as they try to get homeowners’ insurance. Hurricane season officially starts Thursday. ![]()
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