Florida - Monday August 1, 2022: Florida’s home insurance crisis is getting worse according to Mark Friedlander, a spokesman for the Insurance Information Institute, who is concerned that the state is now facing “the largest mass failure of home insurers” in U.S. history.
“We have seen the homeowner’s insurance market in Florida on a road to collapse for the last several years," said Friedlander, "and unfortunately this appears to be escalating in just the last few months.”
The Insurance Information Institute is a nonpartisan group in New York that is focused on insurance research, and Friedlander's assessment of the home insurance market in Florida is based on a number of factors.
Among the signs of collapse, he cites 8 companies who have announced a moratorium on writing new business, another company that’s pulling out of the state, and the fourth insurance company to announce insolvency this years, and now 27 Florida insurers are facing potential downgrades by insurance rating agency Demotech.
“We could see this fall like a board of dominoes, just one after the other," said Friedlander. "We’re extremely concerned that we could be seeing the largest mass failure of home insurers in U.S. history this year.”
The cause, says Friedlander is not losses from storm damage, but fraud. “Here in Florida we have what’s called a man-made crisis driven by rampant roof replacement fraud schemes and excessive litigation filed against insurers,” he said.
During a special session in May the Florida Legislature approved new measures to help curb the insurance crisis. Friedlander said the legislation may be good for the long term "but one thing it did not bring to the market was an immediate fix to the property insurance crisis we’re facing today. The market has quickly deteriorated since that special session.”
Already up to 400,000 Florida homeowners have been dropped or received policy non-renewal letters so far this year, while the average cost for a home insurance policy in the state has soared to $4,231, nearly triple the national average.
If you haven’t been dropped by your home insurer already, Friedlander advises, hang on to your policy. "There are backstops in case something goes wrong with your company. Call your insurance agent. Work with them to find you new coverage.”