Florida’s insurance industry was crumbling long before Hurricanes Ian and Nicole hammered the state.
About 10 insurance carriers either collapsed or pulled back coverage in recent years in response to an explosion of lawsuits. Senator Jeff Brandes said tens of thousands of cases involve inflated claims over roof replacements.
“80% of the litigation on property insurance in the country happens in Florida, we can no longer be the most hurricane-prone state and the most litigious state, those two things can’t coexist and rates go down,” he said.
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And now more than $6.5 billion in claims have been filed since Ian struck. That number is expected to go far higher. As a result reinsurers, the companies who provide insurance for insurance carriers, said they will raise their rates.
After Ian, Florida lawmakers agreed to meet for a special session in December to address the state’s troubled insurance market.
Florida’s former Deputy Insurance Commissioner Lisa Miller said lawmakers need to make bold moves in order to curb some of the highest homeowner rates in the nation.
“That number is going to continue to escalate as the weather continues to worsen and the litigation continues to grow,” she said.
Sen. Brandes told ABC Action News, lawmakers would have to accomplish three things during the special session to move the needle when it comes to premium costs:
- End the one-way attorney’s fees that require the insurance company to pay the policyholder’s legal bills if they prevail.
- Eliminate the assignment of benefits agreements, which transfer insurance policy benefits to a third party, such as a roofing contractor or remodeler.
- Allow for insurance companies to pay claims based on the actual cash value or stated value of a roof instead of the cost to replace the roof.
Any progress made in the special session may bring relief long term but it won’t stop rates from rising in the near future. Your best bet for saving money is to shop multiple carriers, go with higher deductibles and make sure your contents are not over-insured.