Floridians running out of options for home insurance

Published: February 17, 2022 3:52 PM EST
Updated: February 17, 2022 6:19 PM EST

Five insurance companies are pulling out of Florida, leaving homeowners with no choices in providers and major price increases. It is an issue that has been ongoing in Florida and with each season, is becoming worse.

Lawmakers know there is a problem and they are working on a solution that is controversial because critics say it favors insurance companies at the expense of homeowners.

A bill lawmakers are debating would allow companies to not offer replacement coverage for roofs more than 10-years-old.

WINK News asked Mark Friedlander of the Insurance Information Institute if he would do business as an insurer in Florida, “Haha, a loaded question. Thank you. I have to compose myself for that.”

Friedlander operates out of northwest Florida but he feels the pain of the whole state.

“The state of homeowners insurance in Florida right now is in crisis, we are in serious crisis mode, where we’re on a trajectory that the private insurance market could collapse,” said Friedlander.

If that happens, Ken Skelton, and just about every other homeowner in Florida, will feel the pain.

Skelton said his insurance, “It was almost doubled, went up. $1,700.”

Skelton’s insurance company jacked up his premium.

The Insurance Information Institute says only three out of 52 insurance companies in Florida actually made a profit last year.

Friedlander said, “every insurer is losing money, and they’re losing a lot of money.”

Those 52 insurance companies writing policies in Florida lost more than $1.6 billion.

This year, fewer insurance companies will write policies in Florida because of those losses.

That is forcing more homeowners to rely on Citizens Property Insurance Corporation, the state’s insurer of last resort.

777,000 Floridians now use Citizens Property Insurance to protect their homes. That is up 222,000 policies compared to 2020.

Florida State Senator Jeff Brandes said, “We have to fix it via legislation, the courts are never going to fix it.”

Senator Brandes is frustrated by the fact Citizens Insurance is taking on policies at a breathtaking rate and criticized the governor for ignoring the problem.

“Yeah, property insurance is one of my big areas,” said Brandes.

Brandes has been thinking about this for a long time. “The state of insurances, state of Florida is it’s essentially in collapse.”

A collapse that we cannot afford

“A people homeowners are going to find it very difficult to find affordable coverage going forward unless the legislature acts,” Brandes said. “Legislation fixes the incentive to sue your insurance company.”

Brandes believes state law makes it too easy to file suit against insurance companies.

He points to the fact Floridians filed 100,000 lawsuits against insurance companies in 2021 alone.

Friedlander, with the Insurance Information Institute, said, “more than 90% are considered frivolous. So very few would be considered legitimate.”

Not everyone agrees with that.

“Yeah, there are some frivolous lawsuits. But for the bulk part of it, they’re not. They’re just denied claims. It’s a numbers game for the insurance company, if they deny 10 claims, maybe one gets awarded,” said Property Attorney Chris Ligman.

Either way, something has to give. Ligman said, “we need to create alternative dispute resolutions so that everybody doesn’t wind up in court. And these insurance companies don’t end up going under because of litigation.”

State lawmakers are considering a bill that would force state-run Citizen Insurance to stop renewing policies if a private company offers a premium that is not more than 20% more than Citizens’ rate.