Hurricane Ian reignites panic for Florida’s strapped insurance coverage market

State lawmakers have tried to deal with the issue in recent times, however it has executed little to stem the continuing considerations. 

In Could, Florida Gov. Ron DeSantis, a Republican, signed a bipartisan property insurance coverage reform invoice into legislation, aiming to offer some reduction to Floridians. The legislation poured $2 billion right into a reinsurance reduction program and $150 million right into a grant program for hurricane retrofitting, prohibited insurance coverage firms from denying protection based mostly on the age of a roof, required insurance coverage firms to clarify denied claims and supply better transparency, and restricted legal professional charges on frivolous claims and lawsuits. 

DeSantis’ workplace emphasised the protections the legislation created when requested for remark and famous the governor’s touch upon Tuesday during which he mentioned, “There may be extra that I wish to do by way of the wind insurance coverage, and that’s one thing we’re going to deal with. Look, on the finish of the day, we’ve obtained to make it possible for of us are taken care of. So, we’ll try this, no matter we have to do.” 

Regardless of the work by state lawmakers, many remained skeptical that that they had executed sufficient to guard Florida policyholders and be sure that the market may survive a dangerous storm. 

Friedlander mentioned it may take “a few years earlier than the market sees any impacts. Not one of the reforms handed this yr provide any speedy reduction to stabilize the property insurance coverage market.”

He famous that greater than 100,000 property declare lawsuits had been anticipated to be filed in Florida for the second consecutive yr in 2022, which accounts for 80% of the property declare lawsuits within the U.S. These estimates don’t account for any claims or components of litigation tied to Hurricane Ian. 

“Till sturdy actions are taken to disincentivize the massive quantity of property declare lawsuits being in Florida, the market will proceed to deteriorate,” he added.

Florida Insurance coverage Shopper Advocate Tasha Carter mentioned her workplace stays inundated by calls from policyholders who had been dropped by their insurance coverage firms or people who face vital price will increase or restricted capability out there. 

“The problems which have impacted the market are multifaceted,” she mentioned, “and so I do imagine that even with the steps that the legislature has taken in recent times that further steps are essential to stem the tide of great price will increase, to guard shoppers to scale back a few of the frivolous litigation that’s happening throughout the trade and to only typically enhance the general insurance coverage shopper expertise.”

Carter mentioned she is especially involved about those that have not too long ago misplaced protection as a result of discovering a brand new coverage forward of a hurricane may show to be almost unimaginable. She inspired Floridians to show to Residents Property Insurance coverage Company in that occasion, the state-run insurer created to be a security valve for Florida residents. 

That backstop faces a probably untenable place, nonetheless.

As a result of Florida now boasts the best common property insurance coverage premiums within the nation, as a string of personal insurers have closed their doorways, owners have more and more turned to Residents inside a market that has restricted choices. 

Whereas Residents is at present flush with money, it now has roughly 1.3 million policyholders, up from about half 1,000,000 simply two years in the past.

“The larger Residents’ publicity will get, the extra possible a disaster like Ian will trigger it to burn by means of its capital,” mentioned Charles Nyce, a professor at Florida State College the place he serves as analysis director for the Heart for Danger Administration Schooling and Analysis.

Ought to Residents’ monetary place grow to be threatened, it may start levying further assessments not solely by itself coverage holders, however on each insurance coverage coverage within the state, aside from medical and malpractice holders.

A Residents spokesman didn’t instantly reply to a request for remark, however the insurance coverage supplier acknowledged the issue on its web site. 

“The danger of evaluation is actual, particularly as Residents continues to see its coverage depend rise within the face of challenges within the personal market,” it mentioned.

Jon Schuppe contributed.