Florida insurance reform is under scrutiny after a recent report claimed the changes led to an increase in hurricane claim denials and lawsuits. The debate over the effectiveness of these reforms continues, with officials and industry leaders offering conflicting data and perspectives.
Florida Insurance Reform and Hurricane Claim Denials
The main keyword, Florida insurance reform, is at the center of a contentious discussion about hurricane insurance claims and the experience of homeowners following recent storms. In 2024, many Floridians are still dealing with the aftermath of Hurricanes Helene and Milton, with thousands reporting denied or unpaid claims. Recent changes to Florida home insurance rates and hurricane season outlooks have further shaped the insurance landscape for these policyholders.
Background: Hurricanes Helene and Milton Impact
In September 2024, Hurricane Helene struck Florida’s Gulf Coast, causing severe storm surge and property damage. Less than two weeks later, Hurricane Milton followed, compounding the destruction. According to the Florida Office of Insurance Regulation (OIR), 32% of all Hurricane Helene claims and 35% of Hurricane Milton claims were closed without payment. This amounts to 129,348 claims where homeowners received no compensation from their insurers.
- 32% of Hurricane Helene claims closed without payment
- 35% of Hurricane Milton claims closed without payment
- 129,348 total unpaid claims for both storms
Weiss Ratings Report Challenges Reform Effectiveness
A September 2024 report from Weiss Ratings argues that Florida insurance reform has not delivered the intended results. Dr. Martin Weiss, using data from the National Association of Insurance Commissioners, stated that claim denials increased from 40% in 2022 to 46.7% in 2024 after the December 2022 insurance tort reform.
Increased Denials and Lawsuits After Reform
According to Weiss Ratings, insurance companies denied hurricane claims more aggressively after the reforms. Dr. Weiss suggested that the changes made it harder for consumers to sue, which may have encouraged insurers to deny more claims. The report also found that lawsuits filed against homeowners’ insurance companies in Florida rose by 24% per claim denial from 2022 to 2024, based on data from the National Association of Insurance Commissioners.
- Claim denials rose from 40% (2022) to 46.7% (2024)
- Lawsuits per claim denial increased by 24% after reform
Weiss excluded 2023 from the analysis, citing it as a transition year due to Hurricane Ian and the passage of the legislation.
State Regulators Dispute Report Findings
The Florida Office of Insurance Regulation strongly disputes the Weiss Ratings report. Officials stated that lawsuits against insurers are actually down significantly since the 2022 reforms. According to OIR, lawsuits in 2024 are 23% lower than in 2023, and at one point filings were down by 30% within the year.
Insurance Market Stabilization and Rate Decreases
OIR press secretary Shiloh Elliott emphasized that the Florida insurance market is stabilizing. Elliott reported that since the reforms, 17 new property and casualty insurers have entered the market, and rates are declining. As of September 2024, 58 filings for rate decreases and 87 for no rate increases had been submitted, with major insurers like Florida Peninsula Insurance proposing historic rate cuts for homeowners.
- 17 new insurers entered Florida market since reforms
- 58 filings for rate decreases as of September 2024
- 87 filings for 0% rate increases
OIR maintains that the Weiss Ratings data is inaccurate and misrepresents the situation for Florida policyholders.
Homeowner Experiences and Legal Challenges
Despite official claims of market improvement, many homeowners report ongoing difficulties with hurricane insurance claims. Tampa homeowner Liz Ann, for example, was denied coverage after Hurricane Milton because her damages fell below her deductible of just over $3,700. She increased her coverage before the storm but still received no payment, according to her insurer.
Claims Denials and Legal Hurdles
Insurance claims attorney David Murray, based in Tampa, said he has seen an increase in both claim denials and lawsuits since the reform. Murray explained that policyholders now face the risk of paying attorney fees, making it harder for some to pursue legal action. He believes insurers have been emboldened by the reforms to deny or underpay claims that might have been approved previously.
“People feel desperate because they feel like they have no other choice,” Murray said, describing the frustration among homeowners seeking recovery after storm damage.
Insurance Industry Response to Criticism
Florida insurance companies have also pushed back against the Weiss Ratings findings. Executives from Security First Insurance claim that lawsuits have decreased significantly since the reforms. Chairman Locke Burt reported that the company’s monthly lawsuits dropped from 200 in 2022 to 40 in 2024. Security First was among the first insurers in Florida to lower rates post-reform, reducing premiums by 5.9% in 2024. Recent reports show that property insurance companies in Florida have seen profits surge as the market stabilizes.
Reasons for Claim Denials
Burt explained that many claim denials occurred because homeowners lacked flood insurance or had high deductibles. He also noted that a denial is required for FEMA assistance in some cases. For Hurricane Milton, the state listed 17 reasons for claim denials, ranging from lack of coverage to insufficient documentation.
- Lack of flood insurance
- High deductibles
- Insufficient documentation
- Other policy exclusions
Security First President Melissa Burt DeVriese cautioned against generalizing from individual cases, noting that many claims were handled quickly and fairly. She referenced a recent Market Conduct Exam by OIR, which found that only 0.9% of 88,000 claims were not adjusted properly after Hurricanes Ian and Idalia. The exam led to $2 million in fines for nine companies, but officials said the vast majority of claims were paid according to contract terms.
Ongoing Dispute Over Data and Outcomes
The debate over Florida insurance reform remains unresolved. While state officials and insurers cite data showing fewer lawsuits and lower rates, others point to rising claim denials and continued homeowner frustration. Some policyholders, like Liz Ann, eventually received settlements after media attention, but many continue to seek accountability and clarity before future storms.
Frequently Asked Questions About Florida Insurance Reform
What is Florida insurance reform?
Florida insurance reform refers to legislative changes made in December 2022 aimed at reducing lawsuits and stabilizing the property insurance market. The reforms changed how claims and legal disputes are handled between homeowners and insurance companies.
How much did hurricane claim denials increase after Florida insurance reform?
According to a report by Weiss Ratings, hurricane claim denials rose from 40% in 2022 to 46.7% in 2024 after the reforms. State officials dispute these numbers, saying the data is inaccurate.
Are there fewer lawsuits against Florida insurance companies after the reforms?
The Florida Office of Insurance Regulation reports that lawsuits against insurers have decreased by 23% from 2023 to 2024. However, some independent reports claim lawsuits per claim denial have increased.
Can you appeal a denied hurricane insurance claim in Florida?
Yes, homeowners can appeal denied hurricane insurance claims. They may also seek legal advice or file a lawsuit, but new rules may require policyholders to pay attorney fees if they do not win their case.
Where are most Florida insurance reform impacts being felt?
The effects of Florida insurance reform are most visible in coastal areas hit by recent hurricanes, such as the Gulf Coast and Tampa Bay. Homeowners in these regions have reported both increased claim denials and changes in insurance rates.
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