Dwelling Insurance Cowl in Florida Prices So A lot As a result of Nice Forces Are At Battle – Walla Walla Union Bulletin
It is no longer necessary to tell the Floridians that home insurance prices are skyrocketing. One reason for this is the increased frequency and intensity of hurricanes and other storms. They make us a greater risk.
But Florida hasn't seen a major hurricane affecting most of the state since Irma in 2017, and Michael, which caused a great deal of destruction in the panhandle in 2018.
According to experts, the main reason for the further increase in insurance rates is the appalling number of lawsuits for hurricane, roof and water damage compared to other states.
Contractors and insurers are in an eternal state of war. Lawyers on both sides rake in most of the money paid on litigation claims, and everyday policyholders, whether or not they've ever filed a claim, are forced to cough up more money every year to fund those litigation.
Unsurprisingly, every site wants you, as a customer, to act in a way that is beneficial to them.
Insurers want you to call them first. When a water pipe breaks, a tree falls on your roof, a drunk driver crashes into your living room, or your dishwasher breaks and floods your kitchen, most insurers want to know right away so they can suggest known contractors and how and oversee repairs.
Builders, lawyers and public experts disagree. Only they can ensure that you receive a fair settlement from your insurance company. Maybe they can get you a new roof. But their help has proven too costly, say insurance experts.
The consequence of first contacting a third party, insurers say, is that it will drive up the cost of your insurance claim, and therefore all of the insurance that homeowners need to get with mortgage loans.
Florida's Crazy Cost
Florida's insurance market is currently in "free fall" as attorneys and contractors figured out how to play the legal system and bleed the market out, industry officials said repeatedly at the recent Florida Chamber Insurance Summit in Tampa.
The premium costs are exploding. In 2020, state insurance regulators approved tariff increases of more than 10% in 55 tariff applications from insurers, compared with just six in 2016.
Florida consumers with $ 300,000 worth of home insurance paid an average of $ 3,643 per year, the highest in the country after tornado-prone Oklahoma and Kansas and $ 1,338 more than the national average of $ 2,305 according to the marketplace website Insurance.com.
Price comparison website Valuepenguin.com found that the cost of home insurance in Florida rose an average of 32.5% between 2016 and 2021 – the highest in the country. In comparison, the average costs nationwide rose by 10.9%.
The cost in South Florida is even higher. Another price comparison website, Quotewizard.com, calculated average prices for all 67 Florida counties based on unspecified coverage criteria. The three highest priced counties were: Miami-Dade ($ 4,372), Broward ($ 3,453), and Monroe ($ 2,438).
The coverage is now being reduced. Unprofitable insurers are pulling out of urban markets and ditching customers. State-owned Citizens Property Insurance Corp., the insurer of last resort, is expected to have 1 million policies over the next year.
The legal battle lines
Summit attendees said too many homeowners have allowed these third parties to get rich by taking control of their claims and bombarding insurers with inflated bills and costly legal proceedings.
Lawsuits against insurers in Florida are more common and costly, as numerous laws that benefit plaintiffs, as well as a state Supreme Court ruling that allows attorneys to charge higher legal fees than their counterparts in other states, are more frequent and costly, according to insurers are.
A 2017 ruling expanded the circumstances under which attorneys can charge “fee multipliers” of two to 2.5 times their hourly rates. So far, the ruling only allowed fee multipliers in "rare" and "exceptional" cases where lawyers could claim the case was difficult. Following the ruling, attorneys could request fee multipliers in all property insurance cases, according to a position paper by the Florida Association of Insurance Agents.
With the prospect of paying lawyer fees multiplied, it has become more likely that insurers will settle cases rather than defend themselves in a trial, the association said.
Names of companies and lawyers who have benefited from this business model appear hundreds, sometimes thousands of times in a government database of lawsuits against insurance companies.
“You no longer have a property insurance market. They have a market for litigation, ”said Senator Jeff Brandes, a Republican from Pinellas County.
Florida files 76% of US insurance claims
Data shows that Florida insurers face disproportionately high levels of lawsuits compared to insurers across the country.
While the average state outside of Florida has an average of 780 lawsuits each year, Florida is well on its way to filing 95,000 lawsuits by the end of the year, Brandes said.
When a lawsuit is filed, the cost of insurers to close a claim increases threefold, according to analysis by the Florida Office of Insurance Regulation. In 2020, the average non-contentious loss cost insurers $ 11,000. Filing a lawsuit brought the average cost to $ 54,000.
In 2019, Florida caused 8% of all property insurance claims and 76% of lawsuits in the United States, according to analysis of data collected by the office by the National Association of Insurance Commissioners.
Analyst Guy Fraker found in a study commissioned by a policy action committee on insurance reforms that $ 645 of the average property insurance bills of Florida consumers in 2019 was spent on legal fees. went to policyholders – plaintiffs' attorneys got 71% and insurers paid 21% on defense attorneys.
Taken together, insurers that insure Florida real estate lost more than $ 1 billion in 2020, Florida Insurance Commissioner David Altmaier told summit attendees.
“Dachneid” at The Villages
While litigation with South Florida water restoration companies began a decade ago, roofers have been making losses in recent years, said Bob Ritchie, president and CEO of American Integrity Insurance Group. Lawsuits filed by roofers against his company have increased 1,200% over the past five years, while 75% of all roofing claims result in lawsuits, he said.
Contractors advertise homeowners or shower them with gift cards so they can get on their rooftops and inspect for damage. If they can claim 25% or more of the roof needs to be repaired, Florida building codes require that the entire roof need to be replaced.
Getting an insurer to pay for a new roof can save some homeowners tens of thousands of dollars, but everyone else will pay for them at higher premiums.
A "perfect example" of the problem, said Ritchie, unfolded in The Villages, an upscale retirement community south of Ocala.
After roofers started soliciting homeowners there, residents began to see neighbors getting new roofs paid for by their insurers, Ritchie said.
"Then every neighbor got what I call roof envy," he said. “You want a free roof. They talk about it on the golf course. They talk about it on their social outings. And now very good customers expect the roof. "
Florida insurers hope the state legislature in its upcoming session will find ways to address rising roof replacement costs, including resurrecting failed efforts last spring to allow insurers to get coverage on to limit depreciated value. Senator Jim Boyd, chairman of the Senate Banking and Insurance Committee, said he was working on some ideas that he has not yet been able to reveal.
Everyone is to blame
Building contractors and lawyers are not alone to blame for the insurance cost crisis.
For any statistic insurers can cite showing the impact of litigation on rising premiums, lawyers can give examples of insurers failing to meet their responsibilities while policyholders have to wait months or years for money to fix their homes.
Some companies, Palmetto Bay plaintiffs attorney Joe Ligman said, are training their appraisers to ask questions that "trick" policyholders into making statements that disqualify their claims.
"They'll try to get them to say stupid things," he said. “The appraiser will come into the house and say: 'This has been going on for a long time, right?' If it hasn't happened yet. Or they say, “You knew you had harm. Why didn't you report that? ’"
In 2018, three companies were documented sending checks to victims of Hurricane Irma, alleging that confirmation of the checks released companies from further financial obligations related to their claims. Ligman noted that repairs often incur unforeseen costs and state laws prevent insurers from continuing to pay until repairs are completed.
Lawyers also point to long delays in resolving hurricane claims from years ago.
A year after Hurricane Michael hit the panhandle, nearly 16,000 claims remained pending, state data showed. According to the Office of Insurance Regulation's latest balance sheet in November 2020, 5,429 Michael claims were open and 43,000 from Hurricane Irma were still unsolved.
No maintenance contract
Insurers face the challenge of changing consumer attitudes about the use of insurance, said Ricky Thrower, executive director of USAA insurer.
Thanks to solicitation by plaintiffs' attorneys, “There's really one mindset I believe Floridaians have: We pay very high average premiums. We are constantly bombarded with, 'Hey, you have a right, if not an obligation, to sue.'… I think there is an attitude that Floridians use their home insurance as a maintenance contract. "
"Call us first"
Insurers say their customers can avoid exploitation by calling their insurer or agent first – before signing a contract or permit to work.
"We have lists of contractors that we work with that we know can be trusted," said Locke Burt, president and CEO of Security First Insurance.
Some policies leave customers no choice but to call them first. Several insurers, including Heritage Property Insurance Corp., run managed repair programs that require customers to let the insurer decide which company does the work. People’s Trust Insurance has created its own contractor, the Rapid Response Team, to handle repairs.
Such programs have spawned complaints from homeowners who were dissatisfied with the quality of repairs. Lawyers have accused insurers of instructing their workers to save money by using cheaper materials and not restoring properties to their condition before they were lost.
Lawyers say consumers need protection
Plaintiffs' attorneys oppose the idea that policyholders should always call their insurers first.
“I would never allow an insured person to call the freight forwarder first without a public appraisal or attorney,” Ligman said. “The insured cannot assess the extent of his property damage and can even be persuaded to sign an exemption. Without representation, the insured person can be asked to refuse cover. The insured do not know the insurance cover and the articles of association like public experts and lawyers. "
Claim or not claim
Chris Cury, president of the Florida Association of Public Insurance Adjusters, said it was "standard practice" to confirm with an insurer that damage is covered by the customer's policy. But if a claim is not covered, a customer can trigger higher premiums on renewal simply by filing the claim, he said.
"A professionally trained public surveyor has the expertise to review your policy and advise you on how to file a claim, and they will not bill you for advice," he said.
Dave DeBlander, owner of Pro Clean Restoration and Cleaning in Pensacola, said a trusted contractor can investigate the damage and advise the homeowner on whether the damage is enough to warrant a lawsuit.
Alex Cavvacale, owner of Cinergy Restoration in Sunrise, said he only worked in positions offered by insurance companies after joining a contractor who regularly sued insurers.
He works closely with the insurers, agrees on the scope and cost of the benefits before starting work, and says he has no problem raising additional money in the event of unforeseen problems. While his average bill is $ 2,100 for jobs he's seen at other companies at $ 16,000, Cavvacale says he makes good money and has never sued an insurance company.
He is helping homeowners "avoid fraud, avoid public appraisers, avoid attorneys, avoid excessive fees and avoid tearing out walls that didn't need to be torn out," he said.
His advice to homeowners: "Always call your insurer first."
© 2021 South Florida Sunwake. Visit sun-sentinel.com. Distributed by Tribune Content Agency, LLC.