Florida is supposed to be a conservative state, if one goes by the election results. I’ve never been able to link that supposed conservatism with the insurance nightmare that has been loosed on the citizenry. In the USA, conservatives generally support free enterprise, but they are not doing it in Florida. In insurance matters, free enterprise is being driven to extinction. Florida doesn’t seem to be a conservative place at all but, rather, it’s a degenerate dystopia. I grew up in Florida and I love it, but I wish somebody would explain the dog-eat-dog ethos. With conservatism comes a great deal of restraint. Well, where is it in Florida?
Yeah its an enigma for sure. One question that will put it all in perspective – would you buy yourself a new roof when its worn out its useful life if you see that all of your neighbors got theirs for free from the insurance company? Probably not, you’d feel like a sucker. The incentives are all maligned and those incentives are more powerful to the masses than any political ideology.
The conservatives are still there. They just don’t know how to manage what is happening in a CAT prone market where carriers jump in and out. Maybe the DOI is conflicted in their role as the guardian of the consumer, which is typically a a liberal pursuit, and secretly hating themselves for attempting to trying to regulate insurance companies.
The OIR has been pretty accommodating with approving rate increases. The issue is that rate changes that go in now won’t fully earn for 2 years. These companies either need money now in the form of capital or to cut off/non-renew exposure.
February 9, 2022 at 4:26 pm
Tiger88 says:
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4
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Vox, The one area of FL that would make the liberals in NY and NJ proud is insurance regulation. The Office of Insurance Regulation is managed almost entirely by progressives. They essentially function as a consumer advocacy group with power that Ralph Nader could only envy. The rates that are allowed are completely political and not actuarial. It has been that way since I got in the business in the mid-80’s. Our insurance cycles are so extreme because the insurance regulators wait until the wheels are literally coming off and most of the companies in the impacted lines declare they are no longer writing in FL. That is what’s happening now.
Despite the Disney & tourism ads, FL is not a magical place, and some people here have this ethos just like anywhere else. The issues plaguing the local Insurance industry transcend political ideologies- they’re driven by bad actors from across the political spectrum. These issues will not be explained using a black & white or conservative vs. liberal lens. The industry lobbies both political parties depending on which is more receptive to the reforms sought at the time. Recently, I’ve noticed more FL Dems are using the inaction of incumbent FL R’s to address the issue to dunk on them as “Out of touch with consumers” or “ineffective legislators”.
There’s no mystery. The issue is Florida’s one-way attorney fee statute, F.S.627.428, and specifically section (2). All state are required under the U.S. Constitution’s 14th Amendment to practice equal protection under the law. This is known as the Equal Protection Clause. In passing F.S.627.428 (2), Florida’s legislature reasoned that the Equal Protection Clause shouldn’t apply when an insured sues their insurer. If the insurer prevails in a suit, they’re not entitled to attorneys fees, but if the insured prevails, they are entitled to attorneys fees. The logic: Insurers have more lawyers and resources, so insured should get a boost via the law. Insured = David, while Insurer = Goliath. Thus, the FL legislature reasoned that this narrow exemption to the equal protection clause was actually creating de facto equal protection. No one seemed to contemplate that following a claim, the insured could assign the benefit/s of their policies to a commercial interest, such as a roofer or remediation firm. When this happens, you have two, well-funded commercial interests facing one another in court, BUT you have unequal outcomes in law, due to F.S.627.428 (2). Certain unscrupulous roofers and remediation firms have become feeder funds for certain trial attorneys making their living suing insurance companies. This has emboldened such firms to pump up the bill, knowing the insurance companies are overwhelmed and on their heels as a result of unequal outcomes in law, courtesy of F.S.627.428 (2).
Florida would have a more stable insurance market if it devoted more of the revenue from its sales and receipts taxes toward a property reinsurance fund or purchases of private reinsurance.
Let the advantages of Florida’s unique geography–agriculture and tourism–bear more of the cost of the drawback of that geography–hurricane exposure.
I don’t understand the thumbs down, a small hurricane tax if you will tacked onto every hotel room and rental car would create a very nice cat fund that wouldn’t cost locals a dime.
The crisis in Florida HO Insurance might be impacted positively by reining in the courts and the litigation that seems to be exploding presently. It is clear from my vantage point that courts are pro homeowner and anti insurance company, and, that there is a plaintiffs’ bar which seems to specialize in ‘gotcha’ litigation against insurers. We see lots of outlandish claims–many seem to get paid to avoid litigation. Insurance companies seem to lurch from crisis to crisis–sinkholes to public adjusters and roofs to assignment of benefits cases, with lawyers all the way profiting from whatever the crisis du jour is. I’m surprised more haven’t just withdrawn from the market.
8% of all property claims in the US are filed in Florida but 76% of the property insurance lawsuits in the US are filed in Florida.
The Florida insurance market is a wealth transfer scheme taking money from the people and giving it to the trial bar. The state legislature is made of of trial lawyers and they write laws to benefit themselves and their law firms.
As an industry, the carriers will continue to raise rates until they make a profit.
I did withdraw from the market. I moved to another state. I just couldn’t work in the insurance industry in Florida any more. I got sick and tired of getting bullied and beat up by the malefactors of the litigation-industrial complex.
SB 76 curbed one-way attorney fees and the Office of Insurance Regulation has allowed carriers to write enforceable anti-AOB provisions into their policies. As a field adjuster, I’ve already seen the effects of these changes taking place.
The claim cost dynamics for Florida property insurance risks demonstrably can not be managed with prospective rate calculations. Perhaps a viable solution would be to establish “assessment mutuals” to handle the risks and collect estimated deposit escrows, rather than trying to determine premiums.
Climate has no political affiliation. Large portions of Florida will be under water within the next decade. And other weather-related risks are getting worse everywhere, not just Florida. The litigation risks that others are commenting on are, while regrettable, small compared to what’s coming. Now is a good time to get out.
Maybe it’s because Florida Lawsuit Charges United P&C With RICO Violations in Widespread Claims Denials. “Instead of ensuring that field adjusters created honest, accurate reports to confirm that UPC’s insureds received an assessment that reflected their loss, defendants specifically instructed desk adjusters to modify the estimates created by field adjusters to decrease estimates in order to ultimately decrease the amount of money UPC pays to its insureds when claims are made under the insurance policies,”
My point is not DOMICILED Florida Insurance Companies. Most insurance companies are reporting record profits, SOME write in Florida still. There is an old saying, about liars figure and figures lie, etc… My point Insurance Companies will cry this and that. But in reality, few are hurting, even in light of this pandemic. Florida is a mess due to lawyers, legal loopholes that insurance companies and claimants play with. That is what needs to be addressed.
It is much easier to get rid of bad laws than it is to get rid of bad people. To my mind, this mess is driven by bad people. How did they get so many bad people? I don’t quite know, but somewhere between the TV shows “Flipper” and “Miami Vice” Florida turned bad. The place is like a magnet for the dissolute.
The vast majority of the FL HO market is written by Florida domiciled insurers. There are some big names but they write a paltry amount of business since they all abandoned ship in 04/05. These FL insurers have lost substantial amounts of money in the past few years to the point of needed outside capital to stay afloat.
Maybe in the past the FL domestic insurers played games with accounting but those days are long over. If investors weren’t willing to throw money into the market, there would have been several more insolvencies than we’ve seen already.
Apparently BOB decided to use my screen name. You’re absolutely right.
February 11, 2022 at 5:29 pm
patrick says:
Like or Dislike:
3
1
record profits are a joke. That like saying mcdonalds burgers are record price, of course everything is a record these days. People look at a company profit amount and say wow 32 million that is a ton of money but that misleading to any person who knows economics. Any company that has over half billion in liquidity should expect these type of returns easily no matter what market your in. This is not home depot or walmart. These companies have billions of dollars that they are investing in insurance market. Compare the rate of return to how much money they are laying on the line and you will find those profits are much less by margin than home depot and walmart are making
My insurance went up over $1,000 last November!! I live on a fixed income and cannot afford these increases, I’m afraid another increase like this will force me to give up my insurance and I’m very frightened by this.
The state has to do something to keep these prices down!
The state of Florida (Office of Insurance Regulation) owes you no such action against Florida insurers. Were you paying attention when Nixon implemented price controls in the early 1970s and the economic disruptions that resulted?
You assume some of the risk of property loss and pool the rest with other insureds, and must pay an appropriate premium commensurate with the risk, including a risk & profit load to the insurer bearing the risk. If the premium is too high for you, you have the options of taking on the entire risk of loss, raising your deductible – which assumes a greater portion of the risk, but less than 100%, or moving inland to a state not at as great a risk of storm / hurricane damage to your residence.
Your statement is mirrored by a similar one that IS now being made by Florida property insurers; i.e. “our stockholders will not tolerate these negative / diminishing returns on their capital! The State (of FL) regulators have to do something!..”
As regards the increases, some of it is due to the rampant inflation of building material and labor caused by excessive government spending, allegedly for ‘infrastructure’ and restricted supply of domestically produced oil. Instead of ranting about Florida regulators, send letters to your representatives to demand they stop spending YOUR money.
Mr. Solvent, I have no idea why or how your name is tied to my comment. Of course Florida is a mess with HO insurance, always has been, always will be. Nothing at this stage will change it. Maybe take a practice and force companies who love to write the Auto Insurance to put up a small percentage of their books to take on HO policies. NY does it to a degree with Auto Insurance. Insurance is changing so rapidly. Suri, get me insurance quotes….
The problem is that insurance companies are getting sue to death. Litigation costs are out of control and insurance companies keep paying plaintiff attorneys’ fees and frivolous claims (especially roof claims). Insurance companies know this and are pushing to make changes. As always, the solution is to have the homeowners pay the tab. Instead of stopping attorneys by limiting their fees or targeting the attorneys, the State is punishing homeowners by having homeowner continue paying high attorney’s fees. This will end up three ways.
1- Insurance companies tend to fix all their problems by limiting coverages to $10k.
2- Insurance companies will be able to speedy and wrongfully deny claims because now it will be too costly for homeowners to go after insurance companies.
3- Those who have their houses fully paid, will likely not purchase property insurance since it will be worthless to have insurance
Florida is supposed to be a conservative state, if one goes by the election results. I’ve never been able to link that supposed conservatism with the insurance nightmare that has been loosed on the citizenry. In the USA, conservatives generally support free enterprise, but they are not doing it in Florida. In insurance matters, free enterprise is being driven to extinction. Florida doesn’t seem to be a conservative place at all but, rather, it’s a degenerate dystopia. I grew up in Florida and I love it, but I wish somebody would explain the dog-eat-dog ethos. With conservatism comes a great deal of restraint. Well, where is it in Florida?
Yeah its an enigma for sure. One question that will put it all in perspective – would you buy yourself a new roof when its worn out its useful life if you see that all of your neighbors got theirs for free from the insurance company? Probably not, you’d feel like a sucker. The incentives are all maligned and those incentives are more powerful to the masses than any political ideology.
My point was, Florida is supposed to be conservative, but when one gets right down to it, Florida is profligate.
The conservatives are still there. They just don’t know how to manage what is happening in a CAT prone market where carriers jump in and out. Maybe the DOI is conflicted in their role as the guardian of the consumer, which is typically a a liberal pursuit, and secretly hating themselves for attempting to trying to regulate insurance companies.
The OIR has been pretty accommodating with approving rate increases. The issue is that rate changes that go in now won’t fully earn for 2 years. These companies either need money now in the form of capital or to cut off/non-renew exposure.
Vox, The one area of FL that would make the liberals in NY and NJ proud is insurance regulation. The Office of Insurance Regulation is managed almost entirely by progressives. They essentially function as a consumer advocacy group with power that Ralph Nader could only envy. The rates that are allowed are completely political and not actuarial. It has been that way since I got in the business in the mid-80’s. Our insurance cycles are so extreme because the insurance regulators wait until the wheels are literally coming off and most of the companies in the impacted lines declare they are no longer writing in FL. That is what’s happening now.
Despite the Disney & tourism ads, FL is not a magical place, and some people here have this ethos just like anywhere else. The issues plaguing the local Insurance industry transcend political ideologies- they’re driven by bad actors from across the political spectrum. These issues will not be explained using a black & white or conservative vs. liberal lens. The industry lobbies both political parties depending on which is more receptive to the reforms sought at the time. Recently, I’ve noticed more FL Dems are using the inaction of incumbent FL R’s to address the issue to dunk on them as “Out of touch with consumers” or “ineffective legislators”.
There’s no mystery. The issue is Florida’s one-way attorney fee statute, F.S.627.428, and specifically section (2). All state are required under the U.S. Constitution’s 14th Amendment to practice equal protection under the law. This is known as the Equal Protection Clause. In passing F.S.627.428 (2), Florida’s legislature reasoned that the Equal Protection Clause shouldn’t apply when an insured sues their insurer. If the insurer prevails in a suit, they’re not entitled to attorneys fees, but if the insured prevails, they are entitled to attorneys fees. The logic: Insurers have more lawyers and resources, so insured should get a boost via the law. Insured = David, while Insurer = Goliath. Thus, the FL legislature reasoned that this narrow exemption to the equal protection clause was actually creating de facto equal protection. No one seemed to contemplate that following a claim, the insured could assign the benefit/s of their policies to a commercial interest, such as a roofer or remediation firm. When this happens, you have two, well-funded commercial interests facing one another in court, BUT you have unequal outcomes in law, due to F.S.627.428 (2). Certain unscrupulous roofers and remediation firms have become feeder funds for certain trial attorneys making their living suing insurance companies. This has emboldened such firms to pump up the bill, knowing the insurance companies are overwhelmed and on their heels as a result of unequal outcomes in law, courtesy of F.S.627.428 (2).
Florida would have a more stable insurance market if it devoted more of the revenue from its sales and receipts taxes toward a property reinsurance fund or purchases of private reinsurance.
Let the advantages of Florida’s unique geography–agriculture and tourism–bear more of the cost of the drawback of that geography–hurricane exposure.
I don’t understand the thumbs down, a small hurricane tax if you will tacked onto every hotel room and rental car would create a very nice cat fund that wouldn’t cost locals a dime.
The crisis in Florida HO Insurance might be impacted positively by reining in the courts and the litigation that seems to be exploding presently. It is clear from my vantage point that courts are pro homeowner and anti insurance company, and, that there is a plaintiffs’ bar which seems to specialize in ‘gotcha’ litigation against insurers. We see lots of outlandish claims–many seem to get paid to avoid litigation. Insurance companies seem to lurch from crisis to crisis–sinkholes to public adjusters and roofs to assignment of benefits cases, with lawyers all the way profiting from whatever the crisis du jour is. I’m surprised more haven’t just withdrawn from the market.
8% of all property claims in the US are filed in Florida but 76% of the property insurance lawsuits in the US are filed in Florida.
The Florida insurance market is a wealth transfer scheme taking money from the people and giving it to the trial bar. The state legislature is made of of trial lawyers and they write laws to benefit themselves and their law firms.
As an industry, the carriers will continue to raise rates until they make a profit.
I did withdraw from the market. I moved to another state. I just couldn’t work in the insurance industry in Florida any more. I got sick and tired of getting bullied and beat up by the malefactors of the litigation-industrial complex.
SB 76 curbed one-way attorney fees and the Office of Insurance Regulation has allowed carriers to write enforceable anti-AOB provisions into their policies. As a field adjuster, I’ve already seen the effects of these changes taking place.
The claim cost dynamics for Florida property insurance risks demonstrably can not be managed with prospective rate calculations. Perhaps a viable solution would be to establish “assessment mutuals” to handle the risks and collect estimated deposit escrows, rather than trying to determine premiums.
Climate has no political affiliation. Large portions of Florida will be under water within the next decade. And other weather-related risks are getting worse everywhere, not just Florida. The litigation risks that others are commenting on are, while regrettable, small compared to what’s coming. Now is a good time to get out.
Maybe it’s because Florida Lawsuit Charges United P&C With RICO Violations in Widespread Claims Denials. “Instead of ensuring that field adjusters created honest, accurate reports to confirm that UPC’s insureds received an assessment that reflected their loss, defendants specifically instructed desk adjusters to modify the estimates created by field adjusters to decrease estimates in order to ultimately decrease the amount of money UPC pays to its insureds when claims are made under the insurance policies,”
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Not a single Florida domiciled home insurer has posted record profits.
My point is not DOMICILED Florida Insurance Companies. Most insurance companies are reporting record profits, SOME write in Florida still. There is an old saying, about liars figure and figures lie, etc… My point Insurance Companies will cry this and that. But in reality, few are hurting, even in light of this pandemic. Florida is a mess due to lawyers, legal loopholes that insurance companies and claimants play with. That is what needs to be addressed.
It is much easier to get rid of bad laws than it is to get rid of bad people. To my mind, this mess is driven by bad people. How did they get so many bad people? I don’t quite know, but somewhere between the TV shows “Flipper” and “Miami Vice” Florida turned bad. The place is like a magnet for the dissolute.
The vast majority of the FL HO market is written by Florida domiciled insurers. There are some big names but they write a paltry amount of business since they all abandoned ship in 04/05. These FL insurers have lost substantial amounts of money in the past few years to the point of needed outside capital to stay afloat.
Maybe in the past the FL domestic insurers played games with accounting but those days are long over. If investors weren’t willing to throw money into the market, there would have been several more insolvencies than we’ve seen already.
Apparently BOB decided to use my screen name. You’re absolutely right.
record profits are a joke. That like saying mcdonalds burgers are record price, of course everything is a record these days. People look at a company profit amount and say wow 32 million that is a ton of money but that misleading to any person who knows economics. Any company that has over half billion in liquidity should expect these type of returns easily no matter what market your in. This is not home depot or walmart. These companies have billions of dollars that they are investing in insurance market. Compare the rate of return to how much money they are laying on the line and you will find those profits are much less by margin than home depot and walmart are making
My insurance went up over $1,000 last November!! I live on a fixed income and cannot afford these increases, I’m afraid another increase like this will force me to give up my insurance and I’m very frightened by this.
The state has to do something to keep these prices down!
The state of Florida (Office of Insurance Regulation) owes you no such action against Florida insurers. Were you paying attention when Nixon implemented price controls in the early 1970s and the economic disruptions that resulted?
You assume some of the risk of property loss and pool the rest with other insureds, and must pay an appropriate premium commensurate with the risk, including a risk & profit load to the insurer bearing the risk. If the premium is too high for you, you have the options of taking on the entire risk of loss, raising your deductible – which assumes a greater portion of the risk, but less than 100%, or moving inland to a state not at as great a risk of storm / hurricane damage to your residence.
Your statement is mirrored by a similar one that IS now being made by Florida property insurers; i.e. “our stockholders will not tolerate these negative / diminishing returns on their capital! The State (of FL) regulators have to do something!..”
As regards the increases, some of it is due to the rampant inflation of building material and labor caused by excessive government spending, allegedly for ‘infrastructure’ and restricted supply of domestically produced oil. Instead of ranting about Florida regulators, send letters to your representatives to demand they stop spending YOUR money.
Tell me you don’t care about people without saying you don’t care about people.
Mr. Solvent, I have no idea why or how your name is tied to my comment. Of course Florida is a mess with HO insurance, always has been, always will be. Nothing at this stage will change it. Maybe take a practice and force companies who love to write the Auto Insurance to put up a small percentage of their books to take on HO policies. NY does it to a degree with Auto Insurance. Insurance is changing so rapidly. Suri, get me insurance quotes….
The problem is that insurance companies are getting sue to death. Litigation costs are out of control and insurance companies keep paying plaintiff attorneys’ fees and frivolous claims (especially roof claims). Insurance companies know this and are pushing to make changes. As always, the solution is to have the homeowners pay the tab. Instead of stopping attorneys by limiting their fees or targeting the attorneys, the State is punishing homeowners by having homeowner continue paying high attorney’s fees. This will end up three ways.
1- Insurance companies tend to fix all their problems by limiting coverages to $10k.
2- Insurance companies will be able to speedy and wrongfully deny claims because now it will be too costly for homeowners to go after insurance companies.
3- Those who have their houses fully paid, will likely not purchase property insurance since it will be worthless to have insurance