R.I.P. Florida Homeowner's Insurance

My insurance broker told me 6 companies have gone insolvent this year in the Florida market. And a lot of others are pulling out of the state. Same thing is also happening in Louisiana. The legislature making life harder for the insurance companies isn't going to help. Need to stop the fraud and litigation

 

I don't disagree about the fraud but I do disagree this is the way to go about it. Go after the bad actors not the homeowner that has a legitimate claim but now can't afford to fight them when they deny it.

 

The blatant roof damage fraud is out of control. Can't believe it's just common knowledge and nobody has done anything

 

The insurance companies encourage the behavior. What is there to be done?

Go GATORS!
,WESGATORS

 

I can speak from Louisiana. We have definitely had a bunch of companies go insolvent. We lost our company (which, interestingly, was based in Tallahassee, but wrote a lot of policies in Louisiana). But they have been able to find replacement companies without dramatic increases (at least for us personally, although we also haven't filed anything in terms of a claim).

 

I guess I'm missing something. I thought insurance companies were pushing for change because they're caught up in litigation if they "deny" the damaged roof claims. How would insurance companies benefit from being in on this?

 

The issue in Florida seems to be the excessive litigious nature of our state and the laws that encourage it.

 

That litigious nature mirrors the fact that FL has the highest claim denial rate in the country. There's plenty of fault to go around...

 

I think the root of the issue is actually that FL gets hit by a lot of hurricanes. We need to keep beefing up building codes and innovate so roofs don’t fail (or rarely fail) even from 150mph+ wind.

Ian damage is so widespread on the SW coast it’s hard to see “fraud” being the main driver. Even outside the storm surge areas (which were a different type of devastation), I’m seeing far more roof failures than I remember from Charlie or Irma. It’s not even close. Entire neighborhoods where it seemed like they *all* had roof failure + water intrusion. Kind of hard to miss the tarp on the roof and furniture/carpets/drywall rubble piled up along the streets. Seems like homes built in the 60’s, 70’s, 80’s didn’t fare well at all. Where the eye hit, even new construction with tile roofs took damage. But it was pretty striking seeing the older neighborhoods where it seemed like one house after another had a roof failure which led to water in the house.

 

Yep, have a family member whose estimate from their insurance was so bad, they wondered if it was even possible to theoretically do the work for that amount as a DIY buying the materials from Home Depot. Never mind hire a roofer and contractors for repairs, where obviously it was ludicrously insufficient to pay a professional contractor to do anything.

The guess is the insurance tactic is to lowball a 1st estimate well short of the deductible, so that it looks “reasonable” when their 2nd estimate is magically right at the deductible level rather then anything resembling the actual cost to get the work done.

 

Yep, often the story from my experience. Insurance companies are acting like they r the good guys in this, which is hardly the case.

I also wonder how well capitalized the failed companies were in the first place. Never heard of most of them.

 

Isn’t that because most of the claims are fraudulent? The lawyers literally knock on every door of a neighborhood with older roofs, ‘inspect’ and ‘find’ ‘hurricane’ damage. I’ve seen it happen with my very own eyes. Old roofs that needed replacement due to normal wear and tear all of a sudden get replaced by insurance due to supposed hurricane damage.

 

State of Florida passed HB 7065 in 2019 to supposedly stop Assignment of Benefits and the fraudulent roof claims. I paid out of pocket for replacement of my 17-year old roof in 2021. Had neighbors still getting AOB replacements so not sure how the State "fixed" the problem back then.

 

So they wouldn't work on a contingency for a legitimate claim like personal injury attorneys do?

 

Scott maxwell of the Orlando sentinel brings up some good points about the situation. He acknowledges the need for reform due to companies becoming insolvent but is adamantly against most, not all, of the measures in the reform package.

One measure he suggests is some form of mediation in the event a claim gets denied. Also brings up how insurance companies are being given billions but the problem has not been fixed and these companies happily taking corporate welfare are in turn denying claims still.

Floridians pay 3 times the national average for homeowners insurance yet still have trouble getting claims paid?

But let's keep the focus on culture wars and covid vaccines....

If they don't come up with a better solution by 2024 the insurance situation will loom over any presidential campaign in my opinion.

 

State of Florida had 95,000 lawsuits last year related to property insurance claims. 79% of the Legal costs to fight property insurance claims in 2019 was $3B.

Property Insurance Claims Nationally - 9% are in Florida
Property Insurance Lawsuits Nationally - 79% are in Florida

Christmas miracle needed to fix Florida insurance

The big reason Florida insurance companies are failing isn’t just hurricane risk – it’s fraud and lawsuits | FIU News - Florida International University

 

Just like the sinkhole fraud. I have not looked back to see what they did to stop that. But it felt like it was almost overnight that sinkhole claims and ads ceased…

 

Two main things that SB 408 did was limit payouts on claims to actual repairs and ground stabilization and also significantly tightened up the definition of structural damage. Prior to that, ins cos would simply pay the homeowner directly for any and all ‘damage’ whether sinkhole related or not.

 

How do they encourage it?

 

I believe there are laws which dictate a certain % being held in that regard. Not totally sure however