According to the Washington Post, “Florida homeowners paid an average of $4,231 for home insurance in 2022, nearly three times the price in any other state — and rates are expected to increase again this year.”
Why it matters: Those high premiums aren’t translating into sufficient claims payments for Hurricane Ian's damage.
According to the Post’s investigation, after Ian, property insurance companies contracted with private adjusters nationwide to adjust Florida claims.
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But managers at the companies that hired the adjusters often edited the adjusters’ claims reports, deleted pictures of damages, and — in a dozen cases — slashed claims payments by 45 to 97 percent.
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Many claims payments were adjusted lower than the homeowner’s deductible, so they received nothing to pay for their storm damages.
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One field adjuster estimated damages to a home would cost $500,000, but the desk adjuster slashed it to $13,000, blaming the catastrophic roof damage on prior wear and tear.
Florida’s insurance market has been teetering for years, starting in 2005 after five hurricanes had hit the state in 2004. In 2017, Michael came through, and the thinly financed smaller insurers that had filled the void created by the leaving large insurers couldn’t keep up with claims.
What they’re saying: The governor and state CFO both confirmed this week that several insurance companies are under criminal investigation for their actions in slashing payouts.
In the past few years, at least 10 Florida insurers have failed, left the state, or gone bankrupt. The latest one was United Property and Casualty last month.
Florida’s government created Citizens Property Insurance Company as a taxpayer-backed insurance company of last resort, and — over the years — the number of policies it holds has swelled tremendously.
Last Friday, Gov. DeSantis caused a stir when he said Citizens has “not been solvent” and may be unable to pay claims if another major hurricane again hits the state twice in one season. Later that day, over Citizens’ chairman’s objections, the state-backed insurer's board voted to spend $171 to $500 million for an extra $14.5 billion in reinsurance coverage.
What’s next: Hurricane season is fast approaching. If Florida’s latest insurance reforms don’t take hold soon, homeowners can expect to spend more on higher premiums and get less or nothing in return when the next big storm hits.
Go deeper: Orlando Sentinel (subscription required)
