Insurance Frustration Grows in Florida Panhandle

by Ryan Banfill, FJA Communications Director

Damaged houses after Hurricane Michael , WikiMedia

It’s been a year since Hurricane Michael hit Northwest Florida. Insurance companies’ failure to close legitimate claims related to the storm has caught the attention of lawmakers as thousands of Florida property insurance policyholders are stuck in limbo.

The Florida Senate Banking & Insurance Committee this week took a deeper look at property insurance in Florida with a panel of insurers, regulators, and consumer advocates from the state and FJA.

“It’s been a long time since there’s been any pro-consumer legislation that’s really been passed, anywhere,” Attorney Chip Merlin of the Merlin Law Group told members of the committee.

Lawmakers heard about frustration with insurance companies that has grown among Hurricane Michael victims as many still try to recover following the 2018 Category 5 storm.  

Insurance Interests Blame “Gold Rush”

Former State Sen. Locke Burt is the chairman and president of Ormond Beach-based Security First Insurance. He gave the committee a letter he received from Demotech President Joseph L. Petrelli. In the letter, Petrelli says reducing insurance rates is a long-shot. “The optimal situation for future changes in premium will be a moderation in the amount of increase, not a decrease in premium,” Petrelli wrote. 

In the letter, Petrelli also embraced the “blame the attorneys first” tactic commonly used by insurance company and corporate advocates writing, “[T]he fact that the preponderance of claims in the property insurance marketplace are property damage, may have led to the creativity of the plaintiffs bar to insert itself into the more common property insurance claims – roofing and water damage.”

Locke Burt has an insider’s understanding of how the legislative “process” works in Tallahassee. He amplified Petrelli’s move to shift the narrative and deflect the focus of increasing criticism for failure to properly close claims from insurance companies to attorneys. He said fraud and attorneys are responsible for the frustratingly slow post-Hurricane Michael insurance companies’ claims process.

“What’s happening right now in litigated claims is a gold rush,” Burt told Senators on the panel.

Consumer Advocates Say “Protect the Policyholder”

Amy Boggs is the chair of FJA’s Property Insurance Committee. She has worked tirelessly since the storm hit to represent area homeowners who are fighting to resolve their insurance claims.

“We stand at the gate to help these people. Without us, who do they have? Really. You can stop attorney’s fees by not having your claims in litigation. Far from a gold rush. This is a crying shame, is really what it is,” Boggs told committee members. “These are good people. These are hard-working people. These are not people standing in line for a hand-out. They’re trying to get their home rebuilt; their family business back.”

Boggs impressed on committee members to remember the people who are still suffering from the storm and from insurance company neglect of properly paying legitimate claims.

“The underpayments that I see reek of fraud on the other side. And I’m not trying to be heavy-handed here, but fraud is not what the problem is,” Boggs cautioned lawmakers. “Attorney’s fees are not what the problem is. That’s a stale old tagline. The problem is the homeowners are out of their homes. They’re underpaid.”

Boggs urged lawmakers to put teeth into the state’s law requiring insurers to close claims within 90 days or pay interest on the amount owed to policyholders.

Boggs’ tour-de-force presentation to the panel left some of the insurance industry’s supporters struggling to develop a compelling counter argument to her strong pro-consumer performance.

During the committee workshop on property insurance, State Sen. Tom Lee put himself in the position of a policyholder thrust overnight by the hurricane into a complicated and long-term battle with powerful insurance companies.

“Anybody who thinks that you don’t need help as a consumer,” said State Sen. Tom Lee, “listen to the complexity—just the complexity—not whether somebody is trying to game you or not, just the complexity associated with making a determination.”

Tasha Carter is Florida’s new Insurance Consumer Advocate and reminded lawmakers her concern lies with policyholders.

“Insurance consumers pay their premiums and they expect for the insurance company to provide the service that they paid for when the time is needed,” Carter told Senators on the panel.

Read more about it from the Miami Herald and the Insurance Journal.

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