Florida – The state of California faces very dangerous house insurance crisis and Florida’s insurance sector seems to be no far behind in recent years. More and more businesses are exiting the market in what seems to be growing anxiety for homeowners. Companies like Farmers Insurance have ceased offering new contracts for auto, home, and umbrella insurance, therefore affecting about 100,000 current policies.
The weather and high building costs
This retreat is mostly related to the necessity to control risk exposure in a state impacted by strong weather patterns and costly building costs. Homeowners struggle with less choices and rising insurance rates as insurers leave, so complicating their ability to get reasonably priced coverage. Adding to the matter, Florida’s insurance scene is rocked by rampant roofing frauds, false claims, and an increasing number of lawsuits—especially those involving storm damage and roof repairs.
With projected damages from Hurricane Ian alone surpassing $40 billion, this has not only caused a rise in insurance premiums—now almost three times the national average—but also driven at least six insurance companies into insolvency since January 2022. The state-run Citizens Property Insurance Corporation has evolved into a vital but too stretched safety net that forces the state to examine ways to reduce its mounting financial load under these turbulent times.
Companies struggle financially
According to an analysis conducted by Weiss Ratings, several of the biggest insurance companies in Florida have refused almost half of the claims made by Florida homeowners. The report alleges that three main Florida insurers failed to pay up on about 50% of claims in 2023, therefore aggravating the financial burden already underlined by rising hurricane damage and a series of insurance company bankruptcies.
Weiss Ratings, which evaluates over 53,000 institutions and investments, scrutinized the records of some of Florida’s biggest homeowner insurance providers. The results revealed that Castle Key Indemnity Company denied 47.1% of the claims it closed last year. Close behind were State Farm Florida Insurance Company and Castle Key Insurance Company, which denied 46.4% and 46% of claims, respectively.
Founder of Weiss Ratings, Dr. Martin D. Weiss expressed his concerns about the impact of these denials.
“In the wake of increasing property damage from storms and record insurance company bankruptcies, this high rate of claims denials is severely compounding the hardships for Florida homeowners,” Dr. Martin D. Weiss, founder of Weiss Ratings, said. “But what’s most surprising of all is that some of the companies in Florida with the highest denial rates do have the financial strength to afford to pay a much larger portion of their closed claims.”
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The actions of Citizens Property Insurance Corporation, a state-owned company with the greatest number of homeowner policies in Florida, further complicates everything. Weiss Ratings claims this insurer disregarded requests for information on closed claims from insurance commissioners.
The 2022 MCAS national survey shows the wider background of this problem: Florida insurers not only denied the highest percentage of unprocessed claims but also denied the biggest percentage of claims overall. This state of affairs has prompted demands for more industry openness and responsibility.
Dr. Weiss emphasized the need for legislative action to address these issues.
“The public can’t even begin to cope with the property insurance crisis until both the industry and the government provide full transparency,” Dr. Weiss said. “Strong truth in insurance legislation is urgently needed.”
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Weiss Ratings advises homeowners looking for more details regarding the dependability of their insurer to review the Weiss Safety Rating accessible on their website. The research presented here emphasizes the developing difficulties in the Florida property insurance market and the pressing necessity of reform to safeguard homes exposed to rising risks.